Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — UNITED ARAB REPUBLIC

Diplomatic Relations

Mr. Biffen: asked the Secretary of State for Foreign Affairs if he will make a statement on the likelihood of resumed diplomatic relations with the United Arab Republic.

Mr. Marten: asked the Secretary of State for Foreign Affairs if he will make a statement on the re-establishment of diplomatic relations with Egypt.

Mr. Stratton Mills: asked the Secretary of State for Foreign Affairs if he will make a statement on the talks with President Nasser.

Mr. Colin Jackson: asked the Secretary of State for Foreign Affairs if he will make a statement on his plans for improving Anglo-United Arab Republic relations.

The Secretary of State for Foreign Affairs (Mr. George Brown): As announced yesterday, agreement has been reached to re-establish diplomatic relations between the United Kingdom and the United Arab Republic in the first half of December. To this end the two Governments have agreed to proceed very shortly to the exchange of Ambassadors.

Mr. Biffen: Since the national interests of both Britain and the United Arab Republic require normal political stability in the Middle East, will the right hon. Gentleman take this occasion to remind the United Arab Republic of the disruptive consequences of the propaganda broadcast by Radio Cairo?

Mr. Brown: I take the hon. Gentleman's point. I have also taken some

trouble recently to have a look at what is being put cut by Radio Cairo. I do not think it bears out what the hon. Member said about the resumption of diplomatic relations.

Mr. Marten: Did the Foreign Secretary discover during the negotiations anything about the extent to which the Russians are currently aiding the Egyptians?

Mr. Brown: I do not see that that is part of the same question. I think there is everything to be said for having direct diplomatic relations and the hon. Gentleman can be quite sure that I keep my eyes open as to what is going on in that area.

Mr. Stratton Mills: Can the right hon. Gentleman say whether the diplomatic talks included Aden and the South Arabian Federation and an assurance of speedy withdrawal of Egyptian troops from Yemen?

Mr. Brown: I do not think that the latter part of that question is related to this question of the resumption of diplomatic questions, which is quite another matter.

Mr. Jackson: Can my right hon. Friend say whether the resumption of diplomatic relations means there will be a resumption of cultural contacts between the two countries?

Mr. Brown: I would hope it would mean the resumption of full contacts in every way, but the immediate thing, of course, is to get our Ambassadors in each capital, and then we can get closer together on a number of things.

Sir Alec Douglas-Home: These Questions have raised a number of matters which we cannot pursue now, although it would be profitable to do so. Can the right hon. Gentleman say whether we could have a debate on this area, including Aden and the resumption of diplomatic relations, and have it early in December perhaps?

Mr. Brown: We will certainly be at the disposal of the House. In the Middle East a number of things are going on, as well as in Aden, to which the right hon. Gentleman has referred, and there are happenings in New York, including the resolutions there. I would certainly be


ready to discuss with the Leader of the House whether we can manage a debate.

Mr. Henig: Could my right hon. Friend tell the House whether a condition of acceding to the Egyptian Government's request for establishing diplomatic relations was that they made good any losses of British goods lost in June?

Mr. Brown: There was no question of acceding to their request, but on the subject of sequestrated property and other national interests I can assure my hon. Friend that we have that very much in mind.

Mr. Shinwell: Can the Foreign Secretary say whether on the resumption of diplomatic relations any strings or conditions were attached—for example, about freedom of all maritime nations to have their ships pass through the Suez Canal, etc. Or are we to understand that we are simply resuming diplomatic relations? Because so far our policy in the Middle East has signally failed.

Mr. Brown: We are resuming diplomatic relations. I am happy to say that both the Government and the United Arab Republic believe it would be wiser for us to be in full diplomatic relations rather than not. On the other issue, my right hon. Friend knows as well as I do that discussions are going on in New York apart from the question of the resumption of bilateral relations.

Mr. Mayhew: Is my right hon. Friend aware that he is entitled to warm congratulations on the success of the negotiations? Is he aware that the blind prejudice and vendetta against the Arabs in some parts of the House is not widely shared?

Resequestrated British Property (Compensation)

Mr. Wall: asked the Secretary of State for Foreign Affairs what progress has been made in negotiations with the United Arab Republic about the restitution of, or payment of compensation for, British property resequestrated under Proclamation 138 in 1961.

The Minister of State for Foreign Affairs (Mr. Goronwy Roberts): The United Arab Republic authorities have assured us that arrangements are in hand to bring the negotiations to a conclusion.

Mr. Wall: I understand the difficulty about the resumption of diplomatic relations with pre-conditions, but will the Minister undertake to give this matter particular consideration when relations are resumed and also ensure the correct implementation of the Anglo-Egyptian Financial Agreement?

Mr. Roberts: The resumption, as we hope, of diplomatic relations will undoubtedly expedite this matter. It is being considered with all the urgency that the hon. Member has asked for.

Mr. Dodds-Parker: Will the Minister ensure that the products of the Aden refinery will not be made available to Egypt until she settles these outstanding problems?

Mr. Roberts: That is an entirely different question.

Oral Answers to Questions — JAPANESE AND FRENCH EXPORTS (RHODESIA)

Mr. Bruce-Gardyne: asked the Secretary of State for Foreign Affairs (1) what representations he has made to the Japanese Government regarding the 106 per cent. officially recorded increase in Japanese exports to Rhodesia during the first seven months of this year, and with what results; and
(2) what representations he has made to the French Government regarding the 18 per cent. officially recorded increase in French exports to Rhodesia during the first seven months of this year, and with what results.

Mr. George Brown: As my right hon. Friend the then Minister of State told the hon. Member on 13th June—[Vol. 748, c. 58]—and again on 4th July—[Vol. 749, c. 229]—this year, we are in touch with the Japanese and the French Governments on the question of the implementation of sanctions. The details of our discussions must of course remain confidential.

Mr. Bruce-Gardyne: In view of the fact that the end result of two years of sanctions has been the devaluation of the British £ against that of Rhodesia, would not the Foreign Office be better employed, rather than in trying to get Governments to observe an operation


which they clearly regard with contempt, in seeking for other countries to impose sanctions on us?

Mr. Brown: In some ways, the hon. Gentleman gets it altogether wrong; for example. the figures which he quotes about French exports, which show a distinct decrease over those quoted for the earlier months—

Mr. Bruce-Gardyne: What?

Mr. Brown: As for his desire to bring the other issue into question, he knows that this will arise later today.

Oral Answers to Questions — UNITED NATIONS COMMITTEE ON COLONIALISATION (STATEMENT)

Mr. G. Campbell: asked the Secretary of State for Foreign Affairs whether the statement on 23rd October by the United Kingdom representative on the United Nations Committee on Colonialism referring to double standards was made with the authority of Her Majesty's Government.

Mr. Goronwy Roberts: Yes.

Mr. Campbell: Do not these words have a familiar ring? Does not the Minister recognise them as having been used by my right hon. Friend the Member for Kinross and West Perthshire (Sir Alec Douglas-Home) in a penetrating analysis of attitudes to colonialism during a speech nearly six years ago at Berwick-on-Tweed? Does the Foreign Secretary now agree?

Mr. Roberts: There are many things in that speech with which one could not possibly agree if one were wholeheartedly in favour of the United Nations. As for the impartial deployment of petitions on various questions which come before the Committee of 24, on 23rd October the United Kingdom representative expressed not only a party view but, I think, the commonsense view of all the people of this country and of every other country which is a member of the United Nations.

Oral Answers to Questions — ALDABRA (BRITISH BASE)

Mr. Dalyell: asked the Secretary of State for Foreign Affairs what discussions

he has had with the Malagasy Government on the question of a British base or staging post at Aldabra; and if he will make a statement.

The Minister of State for Foreign Affairs (Mr. Frederick Mulley): None, Sir.

Mr. Dalyell: In view of the rather unhappy experience of British bases in various parts of the world ever since the war, would it not be wise and courteous to discuss these matters with the Governments of neighbouring States who may, at least in their own imagination, have some interest?

Mr. Mulley: We have received no representations on the matter from the Malagasy Government. If we did, we should be happy to explain our general policy towards Aldabra and the other islands, and we have made no secret of our ideas about the possible use of Aldabra. Until a decision is taken, any statement would be premature.

Sir T. Beamish: When is a decision likely to be taken about the provision of a staging post on this island, which is of unique ecological importance, and is this a joint Anglo-American project?

Mr. Mulley: Questions of that kind should be addressed to my right hon. Friend the Secretary of State for Defence. They are not matters for the Foreign Office.

Oral Answers to Questions — EAST/WEST RELATIONS

Mr. James Davidson: asked the Secretary of State for Foreign Affairs if he will seek to establish one or more conciliation committees on which members of the legislative assemblies of all nations which are signatories of the North Atlantic Treaty and of the Warsaw Pact are invited to serve, to discuss means of reducing tension in Europe and progress towards a supranational European community.

Mr. Mulley: Her Majesty's Government are always ready to consider suggestions for promoting better East/West relations, but I doubt whether this proposal would be practicable in present circumstances.

Mr. Davidson: Would the right hon. Gentleman agree that there is a direct link between the war in Vietnam and tension in Europe, and that the establishment of conciliation committees such as I suggest in my Question might lead to the re-establishment of the International Control Commission and a move towards peace in Vietnam?

Mr. Mulley: I do not dispute the connection of some of the matters mentioned by the hon. Gentleman, but in present circumstances I would not think it likely to get committees of the kind which the hon. Gentleman has in mind. We already have contact with legislative members of Eastern European countries through the I.P.U.

Oral Answers to Questions — FOREIGN SERVICE PERSONNEL, UNITED STATES (COMMERCIAL WORK)

Dr. Ernest A. Davies: asked the Secretary of State for Foreign Affairs how many members of the Foreign Service are now employed upon commercial work in the United States of America outside Washington and New York.

Mr. Mulley: Twenty-eight, Sir.

Dr. Davies: While thanking my right hon. Friend for that reply and welcoming the extension of these activities deeper into the United States, will he make sure that the people sent on this job are adequately experienced in selling and marketing techniques? Therefore, would he not consider some kind of exchange or secondment arrangement with British industry?

Mr. Mulley: That suggestion goes rather further than the Question on the Order Paper. We are concerned to give the maximum commercial support to our exporters, but it is not the function of the commercial officers of the Diplomatic Missions actually to sell or to be experts in the merchandise concerned. It is for the business men themselves to provide that, but we do our best to support every effort on behalf of our exporters?

Mr. Blaker: Is not the truth that Her Majesty's Government are not sufficiently experienced in selling and marketing techniques?

Oral Answers to Questions — OVERSEAS INFORMATION (EXPENDITURE)

Dr. Ernest A. Davies: asked the Secretary of State for Foreign Affairs what steps he is taking to increase expenditure on overseas information in the light of the recommendations of the Beeley Report.

Mr. Goronwy Roberts: The future level of expenditure on overseas information is still under consideration.

Dr. Davies: While thanking my hon. Friend for that reply, will he make sure that, if additional expenditure is provided, it is directed towards giving a modern image of Britain to improve our trading prospects? Can we have a little less of this image of the thatched cottage and the Beefeater?

Mr. Roberts: My hon. Friend's views are shared by a great many people in this country, including myself.

Mr. Longden: Does not the hon. Gentleman realise that this is one of the most powerful and effective weapons in the cold war and has the great advantage of being bloodless?

Mr. Roberts: I am fully aware of the importance of the proper level of expenditure on overseas information for the reasons given by the hon. Gentleman as well as those given by my hon. Friend.

Oral Answers to Questions — EUROPEAN FREE TRADE AREA

Dr. John Dunwoody: asked the Secretary of State for Foreign Affairs what consultations he intends having to stimulate the development of the European Free Trade Area.

Mr. Mulley: In our view the facilities for consultation provided by the regular meeting of the European Free Trade Association Council both at the Ministerial and the official level are adequate.

Dr. Dunwoody: In view of the protracted nature of our negotiations to get into E.E.C., would my right hon. Friend agree that we should seek with our E.F.T.A. partners some means of bringing the two European groupings closer together economically, socially and politically?

Mr. Mulley: The agreed first priority with E.F.T.A. is to bring about the wider economic integration of Europe of which my hon. Friend speaks. In fact, at their meeting in Lausanne on 26th October, the E.F.T.A. Ministers expressed their unanimous desire for early and successful negotiations with the E.E.C. At the same meeting, a full review was made of the work of E.F.T.A., which is developing along the lines my hon. Friend desires.

Oral Answers to Questions — VIETNAM

Mr. Barnes: asked the Secretary of State for Foreign Affairs if he will make a statement on the latest exchanges he has had with the United States Government regarding the war in Vietnam.

Mr. George Brown: We are in dose and constant contact with the American Government on a wide range of subjects, including Vietnam. But these are confidential exchanges and it would be wrong to reveal details.

Mr. Barnes: Could my right hon. Friend say how the events of the weekend will affect our position in this matter? Shall we go on being subservient to American policy in Vietnam, or shall we be able to break out of the straitjacket the Americans seem to have us in?

Mr. Brown: I do not accept the last part of the question, and I do not think the former part really applies. We shall continue the policy we have been following so far as Vietnam is concerned and have the contacts we have with the American Government, but as I have a number of Questions coming up later, starting at No. 11, on Vietnam, I think perhaps the whole of that area might be left till then.

Dr. John Dunwoody: asked the Secretary of State for Foreign Affairs what proposals he is now able to make towards achieving a negotiated settlement of the conflict in Vietnam.

Mr. St. John-Stevas: asked the Secretary of State for Foreign Affairs whether he will take further steps to bring about a negotiated settlement in Vietnam.

Mr. Winnick: asked the Secretary of State for Foreign Affairs what further steps are being taken by Her Majesty's Government to end the war in Vietnam.

Mr. Blaker: asked the Secretary of State for Foreign Affairs whether he will make a statement on Government policy on the war in Vietnam.

Mr. Leadbitter: asked the Secretary of State for Foreign Affairs what proposals he will now make as co-chairman of the Geneva Convention to promote peace in Vietnam, in view of the fact that the intensification of American bombing has not forced Hanoi to the conference table nor achieved the conditions for a peaceful settlement in Vietnam.

Mr. George Brown: I have nothing to add to the reply which my right hon. Friend the Prime Minister gave to the hon. Member for Banbury (Mr. Marten) on 16th November.—[Vol. 754, c. 626–8.]

Dr. Dunwoody: Has my right hon. Friend seen reports that the Americans may use Polaris weapons with conventional warheads? Have representations been made to the American Government on the subject? Can my right hon. Friend say what Her Majesty's Government's policy will be if these reports prove to be true?

Mr. Brown: I do not think that I can answer a hypothetical question like that. I do not think I have seen the reports to which my hon. Friend refers. I should be glad to look at anything he sends me.

Mr. St. John-Stevas: Will the right hon. Gentleman use whatever influence he may have with the American Government to bring about a bombing pause and a Christmas truce, which perhaps would give a chance for the bombing to be suspended indefinitely?

Mr. Brown: As I have said repeatedly, I want to see the bombing stop. I want to see other warlike acts stopped and an early approach to the negotiating table—at any rate, the talking table. No doubt the hon. Gentleman will have seen the speech made by the American President at San Antonio recently in which he made clear that he would be willing to stop the bombing only so long as it would lead to prompt and productive discussion. I only hope that Hanoi will respond.

Mr. Winnick: Since reports have appeared here in papers like The Guardian that the Americans have been using antipersonnel bombs in North Vietnam, does not that show that President Johnson has


lied when he says that the Americans are only concerned with bombing military installations? Will the British Government at long last dissociate Britain from the terror raids launched by the Americans on North Vietnam?

Mr. Brown: We are not associated with the terror in the North or in the South. We are concerned with bringing the whole bloody war to an early end so that talks can take place. As to the first part of my hon. Friends Question, I do not think that what he said is at all true—

Mr. Winnick: Nonsense.

Mr. Brown: I believe that the President of the United States is trying very hard indeed to get a situation in which he can bring this to a halt.

Mr. Blaker: Is the right hon. Gentleman aware that in recent answers to the House his right hon. Friend the Prime Minister, no doubt unintentionally, has tended to give the impression that the Government are equally critical of American action as they are of North Vietnamese? Would the Foreign Secretary now take an opportunity to correct that impression?

Mr. Brown: I have made it quite plain that we are critical in the sense that we dislike acts of warfare from wherever they come. It is not for us to apportion blame. It is for us to use what offices we have to try to enable the thing to come to a halt. I have no doubt that the Americans wish that to happen. They have in fact tried every single kind of way. I am equally in no doubt that so far the North Vietnamese and their friends have been unwilling to respond.

Mr. Michael Foot: Is it not a fact that the British Government, a year or so ago, specifically dissociated themselves from the bombing of Hanoi and Haiphong? What does the Foreign Secretary have to say about recent reports in many newspapers showing that there have been persistent growing attacks on Hanoi and Haiphong, including severe civilian casualties?

Mr. Brown: So long as the war goes on, as I said to the House some time ago and have repeated many times, this is the great risk. I am doing the best I can to

try to bring it to a halt. When we keep reminding ourselves about what happens in the North, I repeat what I said once before to my hon. Friend: let us remember that there are many other things; for example, Saigon waters are regularly mined by the Vietcong, and nobody ever seems to protest about that.

Mr. Ridsdale: Could the Foreign Secretary, in view of the remarks of many of his hon. Friends, stress that if they wish to get a political settlement it is far better to give some of the advice which they have been giving to North Vietnam and not to the Americans?

Mr. Brown: As I said at the Labour Party Conference at Scarborough, there are two co-Chairmen of the Geneva Agreements. I happen to be one temporarily, and I am in favour of reconvening the conference, but the other one is not. Perhaps the advice might be directed to the quarter which is unwilling to move and not to the quarter that is.

Mr. Hooley: Is my right hon. Friend aware that the Senate Foreign Relations Committee in the United States has now unanimously expressed the view that this is a matter which ought to be raised by the Security Council? Would he support American initiative there, if taken?

Mr. Brown: I would wait to see whether there was an American initiative.

Mr. Winnick: On a point of order, Mr. Speaker, due to the unsatisfactory answer to the question, I shall try and raise it on the Adjournment as soon as possible.

Mr. Eldon Griffiths: On a point of order. Mr. Speaker, could I, through you, ask whether the charge that the President of the United States had lied is admissible under the normal rules of order which we apply in this House?

Mr. Winnick: I am not going to withdraw.

Mr. Speaker: Order. The hon. Gentleman is not being very helpful. I thought that discourteous references to leaders of foreign countries was something to be deprecated. [HON. MEMBERS: "Withdraw."]

Oral Answers to Questions — UNITED NATIONS (EXPENDITURE)

Mr. John Hall: asked the Secretary of State for Foreign Affairs what representations he has made to the United Nations about the proposed expenditure budget for 1968; and what suggestions have been made about reducing staff costs.

Mr. Goronwy Roberts: We have stated in the Fifth Committee of the General Assembly, which is now considering the 1968 estimates of the United Nations, that we shall support a reduction of $5·6 million in the estimates. This includes a cut of $2·8 million in the initial estimates for staff costs.

Mr. Hall: As the budget for 1968 is about 12 million dollars-plus over 1967, will not the staff now run at something like 8,100, and does the Minister believe that the United Nations has been organised in the most efficient and economic way possible?

Mr. Roberts: These estimates are submitted by the Secretary-General and they are scrutinised by a special committee of experts, the Advisory Committee on Administrative and Budgetary questions, and they are then considered by the Fifth Committee of the General Assembly and finally approved by the General Assembly itself. It is usual for the Advisory Committee to recommend certain pruning cuts. In this case it has taken place after the most careful consideration of staffing costs, and, indeed, would represent this year a specially careful and close consideration of the number of staff needed.

Oral Answers to Questions — MIDDLE EAST

Supply of Arms

Mr. Hamling: asked the Secretary of State for Foreign Affairs what representations have been made to his Department by pacifist and anti-war organisations concerning the continued supplies of war materials by the Union of Soviet Socialist Republics to Egypt, and other Arab nations; and if he will raise the matter of these supplies at the United Nations as a threat to peace.

Mr. George Brown: None, Sir.
As for the second part of the Question, I would refer to my speech to the United Nations General Assembly on 21st June, expressing Her Majesty's Government's view that the Powers who supply arms to countries in the Middle East have a responsibility to reach an agreement on arms limitation as soon as possible.

Mr. Hamling: Would my right hon. Friend not agree that Soviet supplies to the Middle East have particularly intensified our economic difficulties in the last fortnight?

Mr. Brown: It is very undesirable that arms should go on being supplied to that or any other area in a totally unrestricted and uncontrolled way. On the other hand, any agreement needs to carry the acquiescence of those concerned. Her Majesty's Government will continue to do all they can to bring about such an agreement.

Mr. Dodds-Parker: Will the Secretary of State confirm that the greatest source of arms in the last ten years has been Czechoslovakia? In view of the wish of this country to improve relations with that country, will he make representations to that Government?

Mr. Brown: That seems to me to be a somewhat different question; but I am sure that what I said just now is true, namely, that all countries supplying arms in that area must come to some controlled and registered agreement which can be enforced, and it will be our aim to bring it about.

Yemen (Gas Attacks)

Mr. Hamling: aked the Secretary of State for Foreign Affairs what representations have been received by his Department about the use of Soviet equipment in air-raids by Egyptian forces in the Yemen using gas against civilians; and what reply he has sent.

Mr. George Brown: None, Sir.

Mr. Hamling: Is that not surprising in view of the recent exchanges in this House about Vietnam? Are we applying double standards on some of these ventures? [HON. MEMBERS: "Answer."]

Mr. Brown: The question, if I got it right, refers to the Yemen.

Mr. Hamling: Yes.

Mr. Brown: I am asked, what representations have been received by my Department about the use of Soviet equipment in air raids by Egyptian forces in the Yemen using gas against civilians?

The answer is, "None, Sir."

Mr. Biggs-Davison: Is it not the case that gas was used against the Yemeni civil population by Egyptian forces using Soviet aircraft? Was not the almost total indifference of Her Majesty's Government, other Governments, and the United Nations, totally disgraceful? What kind of example was that, because other countries might be encouraged to do the same thing?

Mr. Brown: The hon. Gentleman is wrong. We are not indifferent. On the contrary, we took action. We called on other people and sought help everywhere else. In fact no gas has been used since July, we deplored it at the time and we tried to organise action against it. There is no ground whatever for that baseless accusation against us.

Refugees

Mr. Judd: asked the Secretary of State for Foreign Affairs whether he will make a statement on the current position in the Middle East, with particular reference to refugees.

Mr. George Brown: The refugee situation has not altered fundamentally since the reports of the Commissioner General for the United Nations Relief and Works Agency and the Secretary General's special representative, Mr. Gussing. These reports are in the Library of the House.

Mr. Judd: Would my right hon. Friend not agree that the predicament of Jordan, minus the prosperous west bank. trying to cope with 220,000 new refugees, 150,000 in overcrowded cities and 70,000 in camps able to look less than four miles across the Jordan to their old encampments will create tension there?

Mr. Brown: I sympathise with what the hon. Gentleman has to say, but in view of the position which the discussions have now reached in New York, I think probably the less I say about it in public the better.

Oral Answers to Questions — UNITED NATIONS ASSOCIATION (GRANT IN AID)

Mr. Judd: asked the Secretary of State for Foreign Affairs whether he will make a statement about financial assistance to the United Nations Association, which is in financial difficulties.

Mr. Goronwy Roberts: I am pleased to announce that, subject to annual Parliamentary approval, Her Majesty's Government are offering the United Nations Association a Grant-In-Aid for a period of five years only at the rate of £10,000 for the current financial year and for 1968–69, £7,000 for 1969–70 and £5,000 for each of the next two financial years. A Supplementary Estimate will be presented in due course to cover payment for the current year.

Mr. Judd: Does my right hon. Friend agree that this news will be greeted with a great deal of positive reaction in all parts of the House? Does he further agree that one of the most important characteristics of the United Nations Association has been its robust independence, and can he assure us that the Government will expect it to continue in that light?

Mr. Roberts: Certainly, Sir. The United Nations Association has as its Presidents the leaders of all the main political parties in this House. One would therefore expect this announcement to be greeted with impartial enthusiasm on both sides of the House. It is also an Association which does an essential job in promoting interest in, and support for, the United Nations in this country.

Mr. John Hall: Can the Minister say what will be the additional cost of our contribution to the United Nations in 1968?

Mr. Roberts: Not without notice.

Oral Answers to Questions — SUEZ CANAL (BRITISH SHIPPING)

Mr. Marten: asked the Secretary of State for Foreign Affairs if he will make a statement on the British ships trapped in the Great Bitter Lakes.

Mr. George Brown: I have nothing to add to what I said in the Debate on the Address on 2nd November.—[Vol. 753, c. 343–4.]

Mr. Marten: If an international force, including dredgers, were to attempt to clear this international waterway south of the Bitter Lakes to liberate these ships, does the right hon. Gentleman seriously think that either the Israelis or the Egyptians would attack it?

Mr. Brown: That is asking me to go into areas where I would prefer not to. We are doing what we can with the other nations who are concerned—we are by no means the only one—both to get the ships out of the Bitter Lakes, and to get the Canal opened. This is obviously a very urgent requirement for us. It is also an urgent requirement for other people. One of the reasons why we are giving so much attention to getting a Resolution from the Security Council on which progress to a solution of the whole problem can be made is our need to get the Canal opened.

Mr. Eldon Griffiths: I do not want to press the right hon. Gentleman too far, but can he say whether, in discussing the resumption of diplomatic relations with Egypt, he is pressing upon President Nasser very strongly indeed the feeling in this country that if our ships continue to be blockaded or marooned in Suez it will be difficult to commend to the British people the resumption of diplomatic relations?

Mr. Brown: I will not link them together like that, but the hon. Gentleman can be assured that all the time I am pressing on the U.A.R. authorities, and those who can help, the need to get these ships out. I was very encouraged the other day to receive a letter from the skippers of four British ships there. It was written in very warm terms, and showed their morale to be high. They said that they were forming an association in the Bitter Lakes, and they were inviting me to be the only non-time serving member of it.

Mr. Ogden: Is my right hon. Friend aware that there are many in this House who will expect the resumption of diplomatic relations between this country and

Egypt to be followed by the speedy removal of the physical and political obstacles to the movement of these ships, one of which comes from Merseyside?

Mr. Brown: I suggest that we should not link these two objectives together. —[HON. MEMBERS: "Why not?"]— Because the question of the Canal is linked with a lot of other issues about which negotiations are now going on among a number of countries. I suggest to the House that we would be wise to keep it there.

Sir Alec Douglas-Home: Ought not this to be linked with the British ships in the Lakes? Surely the right hon. Gentleman can at least confirm that Sir Harold Beeley has talked about this to the President of the U.A.R.? How long does the right hon. Gentleman think it will take to clear the Canal, part of which I understand is silted up? What is the right hon. Gentleman's information?

Mr. Brown: On the question of representations to the President of the U.A.R., the right hon. Gentleman knows that Sir Harold Beeley raised this matter. I have informed the House about this. Secondly, the right hon. Gentleman knows that at my insistence Sir Harold Beeley visited the ships, and that as a result I had the letter from the skippers about it. Of course we are making representations in Cairo. When we have resumed relations and we have an Ambassador there we will be better placed to make them than we have been up to now, but I repeat—and I am sure that the right hon. Gentleman knows this—that this issue is in many ways connected with others which have to be solved elsewhere.
I have recently answered questions about the timetable for clearing the Canal. Estimates vary from weeks to a few months. It would depend, of course, on the size of the force that one was able to assemble and who was allowed to have the authority for doing it. Weeks or a few months is the usual assessment, but the longer the Canal stays shut the greater will be the silting up, and therefore the smaller the ships that will be able to use it once it is opened. I keep drawing the attention of the U.A.R. to the fact that this is a matter for them to consider very much in their own interests.

Oral Answers to Questions — MOSCOW EMBASSY (SEAN BOURKE)

Mr. Stratton Mills: asked the Secretary of State for Foreign Affairs when Mr. Sean Bourke called at the United Kingdom Embassy in Moscow; and if he will make a statement as to the reason given by Mr. Bourke for his visit.

Mr. George Brown: On 4th September a man claiming to be Sean Bourke called at our Moscow Embassy asking about means of returning to the United Kingdom. The Embassy explained that his identity must be established before a travel document could be issued to him and, as he claimed to be a citizen of the Irish Republic, authority for this would have to be sought from that Government. He would also need a Soviet exit visa. He was asked to call again but has not as yet done so.

Mr. Stratton Mills: Can the right hon. Gentleman say whether Mr. Bourke was asked any questions about the escape of George Blake?

Mr. Brown: That did not seem to arise at that point. The point at issue was to establish whether he was who he said he was. If he is who he claimed to be, he is subject to a warrant in this country. This has nothing to do with the Blake case, but is for threatening to murder a police officer, and we would have had to take the necessary steps to arrange for him to come back to stand his trial if that were his wish, but we never got beyond that, because he never reappeared.

Oral Answers to Questions — FRENCH FOREIGN SECRETARY (STATEMENT)

Sir C. Osborne: asked the Secretary of State for Foreign Affairs what reply he has sent to the French Foreign Secretary's official proposal that Great Britain must devalue the £, as France devalued the franc, before Great Britain will be allowed to join the Common Market.

Mr. George Brown: The French Foreign Secretary made no such proposal, either official or unofficial.

Sir C. Osborne: May I ask the right hon. Gentleman whether Lord Chalfont was the chief—[HON. MEMBERS: "Reading."]—I am reading because it is a very good question.

Mr. Speaker: Order. Even if it is a good question is must not be read.

Sir C. Osborne: Was Lord Chalfont, our chief Common Market negotiator, informed of Thursday's decision to devalue the £ before he made his speech the following morning in Paris, or was he instructed by the Cabinet to deny this truth, and if so—[Interruption.]

Mr. Speaker: Order.

Sir C. Osborne: —has this not destroyed his credibility in Europe?

Mr. Brown: It is very difficult to see how any of that question, read or unread, possibly connects with the Question on the Order Paper.

Mr. Emrys Hughes: Can my right hon. Friend confirm that the French have devalued the franc quite a number of times, and is not this the reason why they are now so economically prosperous that they can lend us money?

Mr. Brown: I suggest that we leave the general question of the devaluation of currency until later in the day. On the first part of the question, the factual answer is, Yes, they have done it several times.

Sir C. Osborne: On a point of order. Owing to the unsatisfactory nature of that reply, I beg to give notice that I shall seek to raise the matter on the Adjournment.

Oral Answers to Questions — GREECE (SYMPOSIUM ON INDUSTRIAL DEVELOPMENT)

Dr. David Owen: asked the Secretary of State for Foreign Affairs why no steps have been taken by Her Majesty's Government to stop the International Symposium on Industrial Development sponsored by the United Nations Industrial Development Organisation taking place in Greece on 29th November.

Mr. Goronwy Roberts: We do not want to disrupt the symposium, which has been arranged for the benefit of the developing countries of the world. The venue has now been confirmed by the General Assembly of the United Nations.

Dr. Owen: Is the Minister aware that Greece has been severely disrupted, and surely it is not too much to ask the United Nations to disrupt its programme and not to show tacit support for the present régime in Greece?

Mr. Roberts: The developing countries, for whose benefit this symposium is being arranged, have made it clear in the General Assembly that they are opposed to any change in the venue, and the General Assembly, on 25th October, accepted without a vote the report confirming the arrangements to hold the symposium in Athens.

Oral Answers to Questions — ISRAEL AND ARAB STATES

Mr. Norman St. John-Stevas: asked the Secretary of State for Foreign Affairs whether he will make a statement of British policy in relation to the conflict between Israel and the Arab States.

Mr. George Brown: We have continued to work within the broad outlines of the policy I set out in my speech to the House on 2nd November. One side or other in the Middle East has found objection to each of the first two resolutions laid before the Council and it was therefore clear that neither resolution even if carried could produce results on the ground. After intensive consultation, I therefore decided last week that Great Britain should table a resolution which I believe sets out a position with which both sides could live. It would enable the Security Council to contribute positively to a peaceful solution and to enable the Secretary General to appoint a representative to proceed to the area. The Security Council may reach a vote this evening.—[Vol. 753, c. 342–5.]

Mr. St. John-Stevas: I am grateful to the right hon. Gentleman for that reply, but can he say what progress he has made in securing the reopening of the Suez Canal? Would not the securing of that objective be a much more valuable contribution towards solving

our balance of payments problem than devaluation?

Mr. Brown: As I said in reply to earlier Questions, the reopening of the Suez Canal must be of major national interest to ourselves as it is of major national interest to many other countries. That is why I gave the Answers that I did earlier. I am sure that, through all the work now being done in New York, we must try to get a resolution of this kind, and then proceed to the kinds of solutions that will lead to the attainment of that desirable objective.

Sir B. Janner: Can my right hon. Friend say why he does not support a meeting of the two parties particularly concerned in this matter in order to see that a settlement is arrived at between them? Is he aware that if the parties did meet it would be only a very short time before a settlement was arrived at?

Mr. Brown: I am not aware of that as a fact. I am aware of it as an opinion of some people, but it is not an opinion that I share.

Oral Answers to Questions — ADEN AND SOUTH ARABIA

Mr. Wall: asked the Secretary of State for Foreign Affairs if he will make a statement on Aden.

Mr. Sandys: asked the Secretary of State for Foreign Affairs if he will make a statement about South Arabia.

Mr. George Brown: I am glad to be able to tell the House that the situation in Aden and South Arabia remains quiet. Talks between Her Majesty's Government and the National Liberation Front are to begin in Geneva tomorrow. I cannot of course yet estimate how long they will continue.

Mr. Wall: Will the Secretary of State bear in mind that we have not only close personal relations but treaty relations with the Federal Government, and that we have some moral responsibility for their safety? Will he also bear in mind the fact that other rulers are not likely to have much faith in Britain if we allow these men to suffer because of their friendship with us?

Mr. Brown: The question of members of the previous Federal Council is a very difficult and complicated one. I have the hon. Member's point in mind and we will do what we can for people who may otherwise suffer, but I am bound to say that the Federal Government gave up and we have to deal with the authorities there, and that we are now doing.

Mr. Sandys: Having withdrawn my Question No. 80, may I ask the right hon. Gentleman whether he can assure us that he will not promise arms or military aid of any other kind to the N.L.F. régime?

Mr. Brown: That is a totally different question, but I cannot give any such assurance. We are going into negotiations with the authorities whom I hope will be the successor Government in South Arabia. It would be very wrong of me to limit what we were going to negotiate with them about before negotiations started.

Sir Alec Douglas-Home: Are not we in danger of falling into a trap here? If we supply military aid following what is bound to be a hastily-negotiated independence, we may easily find ourselves supporting one side or another in a civil war, and that we must not do.

Mr. Brown: I do not see any circumstances in which the supply of military aid as such will be required, either by them or in our interests but, with great respect to the House, negotiations are about to begin. We are within less than a fortnight of the final date of our troops' coming out, and the establishment of the successor authority is very important. I suggest that I would do no good if I were to start laying down the areas within which negotiations should take place.

Oral Answers to Questions — WEST GERMANY (EASTERN FRONTIER)

Mrs. Renée Short: asked the Secretary of State for Foreign Affairs what initiative he intends to take to support the West German Foreign Secretary's proposal that the Oder-Neisse line should be recognised as West Germany's eastern frontier.

Mr. George Brown: I know of no such proposal.

Mrs. Short: I will send a copy to my right hon. Friend. Will he bear in mind the fact that this matter has been awaiting solution for 22 years—ever since the end of the last war? Does not he agree that it is in Britain's long-term and immediate interests that there should be a settlement of this problem?

Mr. Brown: I do not dispute any of that. We have repeatedly said that it is our view that this must be settled in any peace treaty. All I am saying is that I have no information that the West German Minister made the statement alleged. If my hon. Friend has information on that subject, I shall be glad to look at it.

Mr. Blaker: Does the right hon. Gentleman recall that he has already made one faux pas on this subject? Will he be careful not to make another one?

Mr. Brown: I know exactly what the hon. Gentleman has in mind. If he will look at the matter again, he will find that the situation was not as he described it as being.

Oral Answers to Questions — CHINA

Dr. David Kerr: asked the Secretary of State for Foreign Affairs what proposals he now has for improving relations between Great Britain and the People's Republic of China.

Mr. George Brown: I have nothing to add to the Answer which my hon. Friend the Under-Secretary of State gave to the hon. Member for Birmingham, All Saints (Mr. Walden) on 13th November.—[Vol. 754, c. 19.]

Dr. Kerr: Will my right hon. Friend note that one way at least to assist this country in its present economic difficulties would be to make use of the potential market in that part of the world and that as long as our relations with China are bedevilled by axe-swinging in this country and riots in Peking we are placed in great difficulties? Will he note that we support his forbearance in maintaining such diplomatic relations as exist, but that we urge him to take such action as is open to him to improve them?

Mr. Brown: Yes, we are trying to do exactly that. It is worth bearing in mind that the level of our exports has been


maintained despite the difficulties and that the estimated total for the first nine months of 1967 was just under £34 million. We will go on doing what we can from this end both to maintain and improve relations, and I shall be glad for any help that my hon. Friend can give me at the other end.

Mr. Tilney: Will the right hon. Gentleman bear in mind the importance of trade with the Republic of China, whose imports are increasing enormously and in which we have a negligible share?

Oral Answers to Questions — EAST GERMANY (TRADE)

Dr. David Kerr: asked the Secretary of State for Foreign Affairs what steps he now proposes to take to facilitate the expansion of trade and cultered exchange between Great Britain and the German Democratic Republic.

Mr. Mulley: As our trade with East Germany has been developing satisfactorily, and cultural exchanges are taking place on private initiative, my right hon. Friend does not propose taking any special steps in these fields.

Dr. Kerr: Will the Minister bring to his right hon. Friend's notice the greater likelihood of my being able to go to Berlin than to Peking, and that if I am able to do so I shall convey those feelings? But will he note that there are still continuing obstacles to trade between this country and the fifth largest industrial country in Europe? In these difficult economic times is it not wise to accord some measure of de facto recognition to the German Democratic Republic?

Mr. Mulley: Despite our non-recognition trade has been developing satisfactorily under private arrangements and, as my hon. Friend knows, exports doubled between 1965 and 1966. We shall be most grateful for anything which my hon. Friend can do to increase them further in the next year.

Mr. Mikardo: Does my right hon. Friend realise that, in spite of any increase, we are doing much worse in this market than are our West European competitors, who are bound by the same N.A.T.O. rules as we are in their dealings with the German Democratic Republic, because those rules are hon-

oured by Great Britain and Great Britain alone, and the others dodge round them?

Mr. Mulley: If my hon. Friend will let me have any details, I shall be happy to look at them.

Mr. Gresham Cooke: In order to try to improve trade with East Germany, will the right hon. Gentleman consider the restrictions on East Germans coming to this country as buyers of equipment and, in particular, the delays and difficulties over obtaining passport visas by East Germans?

Mr. Mulley: The hon. Member has a later Question on this subject, but I can tell him that already this year 619 applications for temporary visas have been granted to businessmen visiting this country from East Germany, and none have been refused.

Oral Answers to Questions — SPAIN (GIBRALTAR)

Mr. Colin Jackson: asked the Secretary of State for Foreign Affairs what representations Her Majesty's Government are making to the Spanish Government concerning the continued harassment of Gibraltar.

Mr. George Jeger: asked the Secretary of State for Foreign Affairs when the proposed talks with Spain are to commence; and what subjects have been placed on the agenda by each side.

Mr. George Brown: As my hon. Friend the Under-Secretary told the House on 23rd October, I have told the Spanish Ambassador in London that talks on Anglo-Spanish relations, including the question of Gibraltar, could begin in the near future between senior officials of the two Governments. In these talks we will try to bring about an improvement in the situation at Gibraltar. There is no formal agenda.—[Vol. 751, c. 1349–50.]

Mr. Jackson: Would the Foreign Secretary take an early opportunity to remind Madrid that General Franco's remark about Gibraltar being Spanish is incorrect? Second, will he inform us whether or not the attempted interference with British in-flying aircraft is taking place or has ceased?

Mr. Brown: All these matters, particularly the latter part of my hon.


Friend's question, will, of course, be discussed in the talks. On the first part, I set out our position very clearly not only in talks with the Spanish Foreign Minister but in my speech to the General Assembly of the United Nations. It is on that basis that we shall be holding the talks.

Mr. Jeger: When my right hon. Friend says that there will be discussions about Gibraltar, will he confirm that the sovereignty of Gibraltar is not negotiable?

Mr. Brown: My hon. Friend will have seen that, in the speech to which I referred at the United Nations and again in Lord Caradon's speech, we have made it quite plain that we could not regard decolonisation as meaning the handing over of a people against their wishes to another Government.

Mr. Tapsell: Will the right hon. Gentleman give an absolutely firm assurance that the Government will not add the betrayal of the people of Gibraltar to the other shames which they have brought upon this country in recent weeks?

Mr. Brown: I am sure that the hon. Gentleman was glad to get that off his chest. From our point of view, the position stays as I made it plain to the U.N. Assembly.

Oral Answers to Questions — TURKISH LEVIES (BRITISH HAULIERS)

Mr. Macdonald: asked the Secretary of State for Foreign Affairs (1) why six weeks elapsed from the publication on 17th July of Turkish Decree No. 6/8454 before he was aware that he would have to apply for exemption for British hauliers from the levies imposed by this decree; and if he is aware that his delay in obtaining exemption has placed British hauliers at a disadvantage compared with their competitors in countries whose Governments have already obtained exemption;
(2) by what date he hopes to obtain exemption for British hauliers from the levies imposed by Turkish Decree No. 6/8454; by what date he hopes to obtain the agreement of the Turkish Government to refund the levies already paid; and by what date the refunds will be made.

Mr. Goronwy Roberts: I will, with permission, answer these Questions together.
Shortly after publication of the Turkish Decree No. 6/8458 a translation was sent to London by our Ankara Embassy. The Ministry of Transport then wrote to the Turkish authorities on 16th August and in the light of their reply a formal case for exemption was prepared and put to the Turkish Government at the end of September. Since the Decree was published without prior notice and the matter is a very complex one, I do not consider that our approach was unduly delayed. Negotiations are now in progress to secure exemption on a reciprocal and retrospective basis. I cannot say when these will be concluded.

Mr. Macdonald: I will, with permission, ask both my supplementary questions together. Is my hon. Friend aware that my constituent is having to pay £300 per trip every time a vehicle goes through, and that it is £340 with effect from today? Is he aware that no firm can stand this cost? In the event that he is unsuccessful in obtaining the agreement, what plans has he to pay the refund of the levies already paid? Is he prepared to pay compensation?

Mr. Roberts: I can assure my hon. Friend that the negotiations now in progress show good hope that we shall succeed in securing exemption on both a reciprocal and a retrospective basis.

Oral Answers to Questions — SOUTH AMERICA (COMMERCIAL REPRESENTATION)

Mr. Bob Brown: asked the Secretary of State for Foreign Affairs whether he is satisfied with the present level of his Department's commercial representation in South America.

Mr. Mulley: Yes, Sir.

Mr. Brown: Would my right hon. Friend not agree that, particularly in view of the events of the past 48 hours, it becomes more urgent than ever to get top-flight salesmen on our commercial staffs?

Mr. Mulley: We are making a special effort in Latin America on the trade side. Indeed, throughout the world, promotion of exports is a priority of diplomatic staff. However, I stress again, as I did earlier, that it is not the job of the


commercial staff of embassies actually to sell the goods. The selling must be done by the manufacturers concerned.

Oral Answers to Questions — WORLD HEALTH ORGANISATION (PORTUGUESE TERRITORIES)

Mr. Biggs-Davison: asked the Secretary of State for Foreign Affairs what instructions were given to the British representative on Her Majesty's Government's policy at the World Health Organisation meeting at Brazzaville to the resolution denying aid to Portugal's overseas territories.

Mr. Mulley: The United Kingdom delegate was the Minister of Health of Swaziland. We are opposed to the introduction of political issues into the proceedings of technical United Nations meetings. The Minister was therefore instructed not to take part in such debates and accordingly abstained from voting on a resolution which supported a 1966 resolution of the World Health Assembly suspending technical assistance to Portugal.

Mr. Biggs-Davison: Is not the introduction of ideological feuds into these specialised agencies to be deplored? Is not this case particularly unfortunate, since the W.H.O. has expressed its admiration of Portugal's work in Africa against leprosy and sleeping sickness?

Mr. Mulley: It was because we thought it undesirable to have political debates in technical conferences designed to help the people in the region concerned that we instructed our delegate not to take part in those proceedings.

Oral Answers to Questions — EUROPEAN ECONOMIC COMMUNITY

Sir C. Osborne: asked the Secretary of State for Foreign Affairs whether, in his discussions about Great Britain's entry into the European Common Market, he will make it an absolute condition that the coloured immigrants settled here will be entitled freely to live in any of the Common Market countries, no matter how numerous they become in the United Kingdom.

Mr. Mulley: No, Sir.

Sir C. Osborne: Why not? In view of the fact that there are a million coloured immigrants here already, will the right hon. Gentleman not press that there should be as little anti-racialism in Europe as there is in this country? Why not protect them?

Mr. Mulley: The hon. Gentleman has entirely misinterpreted the policy of the Community regarding the free movement of labour. It is not anti-racial in character, as he suggests. The right of free movement depends not on residence or previous employment but on nationality. There is, of course, a number of immigrants in this country who are already United Kingdom citizens or who have a sufficient residence to become citizens, and in this case they would then have the right of free movement throughout the Community. My right hon. Friend the Prime Minister went into this important question—I agree that it is an important question—in the debate in May.

Oral Answers to Questions — UNITED STATES (ANTI-BALLISTIC MISSILE SYSTEM)

Mr. Frank Allaun: asked the Secretary of State for Foreign Affairs if, in view of Great Britain's support for the agreement banning nuclear test explosions in the atmosphere, he will, either through the North Atlantic Treaty Organisation or through the talks at Geneva, ask the United States Government not to proceed with building an anti-ballistic missile system, which would amongst other objections require atmospheric tests.

Mr. Mulley: The United States Secretary of Defence, Mr. McNamara, has stated publicly that the anti-ballistic missile system will not require atmospheric nuclear tests.

Mr. Allaun: How is it credible that one can test an anti-ballistic missile system without an atomic explosion in the atmosphere? It just does not add up.

Mr. Mulley: I hope that my hon. Friend is wrong in his assessment that it will be necessary for either the United States or the Soviet Union Governments, as part of their anti-ballistic development, to break the partial test ban treaty to


which both are signatories. I do not accept easily that one's allies, in a matter of this kind, will behave in that way.

Oral Answers to Questions — N.A.T.O. FORCES, CENTRAL EUROPE

Mr. Frank Allaun: asked the Secretary of State for Foreign Affairs if, following the investigation into the pro-Nazi past of General Schnez, he will oppose his appointment as Chief of the North Atlantic Treaty Organisation forces in Central Europe, where the 23 divisions and 200 aircraft under his control would include British troops.

Mr. Mulley: General Schnez has not been nominated for this post.

Mr. Allaun: In that case, I am only too delighted to withdraw my Question.

Oral Answers to Questions — Mr. GERALD BROOKE

Mr. Blaker: asked the Secretary of State for Foreign Affairs whether he will make a further statement about the case of Mr. Gerald Brooke.

Mr. Hooley: asked the Secretary of State for Foreign Affairs what further information he has been able to obtain about the health of Mr. Gerald Brooke; if he is satisfied that there is reasonable access to Mr. Brooke by British officials in the Soviet Union; and if he will make a statement.

Mr. George Brown: We have asked the Soviet authorities urgently to let us have a comprehensive report on Mr. Brooke's health. In addition we are continuing our representations to the Soviet authorities for another visit by Mrs. Brooke as well as for a consular visit.

Mr. Blaker: Would it not be useful if, in addition to making representations about this case to the Soviet Government, the British Government also took some practical steps to demonstrate their disapproval? How many members of the British Cabinet were invited by the Soviet Ambassador to the reception which he recently gave to celebrate the 50th anniversary of the Revolution—

Mr. Speaker: Order. The hon. Gentleman should ask his supplementary question briefly.

Mr. Blaker: —and did any of them refuse?

Mr. Brown: I will take any steps that will help Mr. Brooke and I am taking all those I can think of. I can see no point—and a lot of possible harm to Mr. Brooke—in taking steps that do not help him but put us in a less good position to make representations to the U.S.S.R.

Mr. Hooley: Has my right hon. Friend been able to secure any definite information recently about the health of Mr. Brooke?

Mr. Brown: No, Sir. Since we heard what Mr. Weatherley said when he came back, we have made urgent requests to the Soviet Government for up-to-date and immediate information and we are awaiting their reply.

AGRICULTURE (FOOT-AND-MOUTH DISEASE)

Mr. Ridley (by Private Notice): asked the Minister of Agriculture, Fisheries and Food whether he will make a further statement on the foot-and-mouth disease outbreak.

The Minister of Agriculture, Fisheries and Food (Mr. Fred Peart): Yes, Sir. This is one of the gravest epidemics of foot-and-mouth disease which has occurred this century, not merely because of the number of outbreaks, the number of animals slaughtered or the cost, but also because of the virulence of the virus. The speed with which symptoms have appeared in infected animals and the speed with which the disease has spread in infected areas, has been unprecedented.
The number of outbreaks so far is 639. The number of animals slaughtered is approximately 57,500 cattle, 26,500 sheep and 31,000 pigs. There have been 291 outbreaks in Cheshire, 223 in Shropshire, 44 in Flintshire, 37 in Denbighshire, and others in Montgomeryshire, Staffordshire, Lancashire, Derbyshire, Worcestershire, Westmorland, Gloucestershire and Leicestershire.
The campaign against the epidemic continues. The all-out efforts of my veterinary service and the unstinted help which they are receiving from the private profession, the military, the police, local


authorities and everyone in the infected areas are beyond all praise. I pay tribute to the farming community for the fortitude with which they have borne their heavy losses.
I thank all those, including the stewards of the National Hunt Committee and the Royal Automobile Club, who have cancelled events likely to lead to considerable assemblages of people in the countryside for the public spirit they have shown. I ask the public to continue to keep out of the infected areas as far as possible.
I ask all farmers to give particular attention to four important points. First, they should redouble their vigilance in watching for symptoms of the disease and continue to report anything suspicious immediately. Second, every effort should be made to house as many animals as possible. Third, they should try to keep livestock in separate units and to stop any movement of personnel, feedingstuffs and machinery between these units. Fourth, they should keep visitors and vehicles as far as possible outside the farm gate.
I have said that this is a very grave epidemic, but it is being contained. If the present united effort is kept up, we shall win through.

Mr. Ridley: While I thank the Minister for making that statement, may I ask him to give an assurance that in his opinion he has adequate powers to prevent the movement of persons, vehicles and horses in and out of all the affected areas? Can he further say what steps he is contemplating taking to make quite certain that no more infection comes into this country from South America, if, indeed, that is where it comes from?

Mr. Peart: The answer to the first part of the question is, Yes. On the second part of the question, I am looking at the matter. As yet I have no positive proof. I am giving the whole matter of imports very active consideration.

Dr. John Dunwoody: Would my right hon. Friend consider the possibility of protecting disease-free areas in the country which are geographically isolated by setting up stations along main roads so that all vehicles entering areas

such as the far South-West and Scotland are disinfected before they enter them?

Mr. Peart: I have looked at that suggestion. I know that my hon. Friend has been in contact with the Ministry about it. I do not think that it is practicable, but I will give it further consideration.

Sir A. V. Harvey: While no doubt the restriction on the movement of people is correct, as this unfortunate epidemic is now approaching a national disaster will the Minister consider visiting Cheshire, at any rate, and some of the other infected areas to try to help morale among some of the unfortunate farmers? He has not been there yet.

Mr. Peart: I have deliberately refrained from going into the infected areas and I think that that is right. I must set an example. I announced the other day that I had cancelled a visit abroad to give strength and support to my veterinary staff. Yesterday, I was at the Ministry after my visit to the North. I have tried to stress that I will do everything possible. I will bear in mind what the hon. and gallant Gentleman said. If he feels that a visit by me is necessary, I will go. But it is far better that I should have control at the centre.

Mr. Biffen: Is the Minister aware that there is immense regard and respect for the work being done by the veterinary staff? Is he satisfied that he has sufficient staff to deal with all the obligations normally placed upon them in view of the quite fantastic and terrifying spread of the epidemic?

Mr. Peart: Yes, I am satisfied. I mentioned in my statement to the House last week that I had 300 veterinary staff at my service. I have also diverted other staff from among my own national advisory service, and they are working at full stretch. If we can carry on as we are, I think that we can win through all right, but if I have to take further measures I will report them to the hon. Member.

Mr. Godber: While echoing the praise which the Minister offered to those who are working so hard and his sympathy to those who have suffered from this outbreak, may I ask him to consider setting up a special committee with his Department to look at the consequential problems, which will be very serious for


farmers, particularly in Cheshire and Shropshire?

Mr. Peart: I would rather wait until we succeed in containing the epidemic. It may well be that we shall have to look at that again. I will not close my mind to the suggestions made by the right hon. Gentleman, who has been very constructive indeed.

Mr. Parkyn: Is my right hon. Friend aware that there is some informed opinion which now holds the view that the virus may be spread airborne from the way in which the carcases are destroyed by fire? Is his Ministry looking into that possibility?

Mr. Peart: Every supposition is being examined. We are looking at that matter carefully.

Mr. Pardoe: Is the Minister prepared to say what progress has been made towards ascertaining the original source of the epidemic? Further to the point made by the hon. Member for Falmouth and Camborne (Dr. John Dunwoody), in view of the fact that it is comparatively easy for Cornwall to be isolated from the rest of the country, would he set up disinfection points for the tyres of motorcars?

Mr. Peart: If I knew the source, I would tell the House. I do not know the source. I wish I did. Our scientists and veterinary staff are trying to find out. I have already answered the second part of that question.

Dr. David Kerr: Have any trials been made in the use of anti-viral agents? If so, under whose auspices are they taking place? If, when he refers to disinfecting the roads, he means one man walking along with a watering-can, that makes those of us who know anything about disinfestation laugh.

Mr. Peart: I do not know what my hon. Friend is referring to. Pirbright, which is the research centre, is the finest in the world. We do research for Europe and other parts of the world. We are examining this problem continually.

Sir W. Bromley-Davenport: Have we been importing any meat into this country from South America which the

United States refuses to accept because of suspected disease?

Mr. Peart: I cannot say whether or not we have been importing meat which would have gone to the United States. The hon. Gentleman knows that we have traditional imports from South America. I assure the House that I am looking into this matter carefully.

Mr. Elystan Morgan: Has the Ministry studied the practicability of vaccinating all cloven-footed animals in the infected areas?

Mr. Peart: Certainly. This was examined not only by my Ministry but by an independent committee, the Gowers Committee, which reported on this subject. It was found that one vaccination would cost between £10 million and £15 million for a whole country—and that would be for only one vaccination. It might be necessary, however, to have two vaccinations in the first year, followed by one vaccination the following year. This would, therefore, be an extremely costly process.

Mr. Webster: Is there sufficient disinfectant in the country to cope with this emergency? If not, is the right hon. Gentleman taking steps to provide more?

Mr. Peart: I am not aware of any shortage of disinfectant.

Earl of Dalkeith: What consultations has the right hon. Gentleman had with the Secretary of State for Scotland with a view to sealing off the Scottish border and subjecting all vehicles to the most rigorous disinfecting?

Mr. Peart: As a Border man, I am very much attracted to that idea. I assure the hon. Gentleman, on the general issue, that I am in touch with my right hon. Friend on this as on all agricultural matters.

Mr. Lipton: Can my right hon. Friend say what effect this lamentable epidemic will have on meat supplies and prices?

Mr. Peart: I cannot say as yet, but, obviously, it will have some effect.

Viscount Lambton: Has the new procedure for slaughter, which was recommended this year, been carried out in every respect by the Ministry? Is it not


somewhat remarkable that there has not been an outbreak in Northern Ireland since that country ceased importing meat from the Argentine?

Mr. Peart: I have, of course, sought to implement many of the recommendations made by the N.F.U., which emanated primarily from the Northumberland County Branch of the union. I appreciate the hon. Gentleman's concern in connection with the Northumberland outbreak. I have a list with me of the recommendations that have been accepted—for example, warning notices and the use of the captive bolt pistol. I assure the hon. Gentleman that many of the recommendations have been put into effect by me.

Mr. G. Campbell: Will the right hon. Gentleman, with the Secretary of State for Scotland, consider imposing drastic restrictions on the movement of animals in order to try to preclude the risks of the disease from spreading to areas which are not now infected?

Mr. Peart: I have taken a number of measures and, as I have told the House. I am in touch with my right hon. Friend the Secretary of State for Scotland. I assure the hon. Gentleman that we will take whatever measures are necessary.

Mr. Maxwell-Hyslop: Since many of these unfortunate farmers will have no

income at all for six months and cannot be expected to borrow at an 8 per cent. Bank Rate, will the right hon. Gentleman make low or zero interest rate loans available so that they can keep going till they are able to resume their farming activities again?

Mr. Peart: I am unable to answer that question. The hon. Gentleman will be aware of the compensation policy. I am following the policy agreed by my predecessors. I see no reason to alter this position.

Mr. Maxwell-Hyslop: But there was no 8 per cent. Bank Rate.

Several Hon. Members: Several Hon. Members rose—

Mr. Speaker: Order. The Chancellor of the Exchequer. Statement.

Sir C. Taylor: On a point of order. In view of the economic statement which the House anticipates and of the insistence which the Government have placed on the incidence of the dock strike, could we have an assurance from the Government that an answer will be given to Question No. 100 either now or during the course of the Chancellor's economic statement?

Mr. Speaker: I think that the hon. Gentleman knows as well as anybody else that that is not a point of order.

£(Exchange Rate)

The Chancellor of the Exchequer (Mr. James Callaghan): With permission, Mr. Speaker, I will make a statement about the measures announced by the Government during the weekend, and I will circulate in the OFFICIAL REPORT a copy of the statement which I issued on Saturday evening, announcing that with the concurrence of the International Monetary Fund the exchange rate of the £ had been lowered from 2·80 dollars to the £ to 2·40 dollars to the £.
The accompanying measures provide for an increase in Bank Rate to 8 per cent.; a limitation on bank advances except to priority borrowers especially exporters; an increase in hire purchase deposits on motor cars to 33⅓ per cent. and a maximum repayment period of 27 months; an increase in Corporation Tax to 42½ per cent.; the abolition of the export rebate now costing just under £100 million a year; the withdrawal of the extra amount received by manufacturers in the S.E.T. premium except in development areas thus saving over £100 million.
My right hon. Friend the Lord President of the Council will make a statement on the changes in Parliamentary business that now become necessary. I will, therefore, confine myself this afternoon to a statement of the effects and underlying objectives of the decision.
This change in the value of the £ will, of course, have the effect that the things we buy from abroad will cost us more and things we sell abroad will become cheaper for people overseas to buy.
This has both advantages and disadvantages. On the credit side, there will be substantial help to our balance of payments. On the other hand, because we shall need to pay higher prices for some of our imports we must expect in the coming months a small but noticeable rise in prices.
There will be no need for all prices to rise and the Government intend to maintain a careful check on the movement of prices in the coming months to ensure that there are no unnecessary increases. Because some rise in prices is inevitable, the Government will take, at the right time, the steps that may be necessary to protect the most vulnerable sections of the community from hardship.
This will not be done by increasing overall demand, but by bringing about, in a non-inflationary manner, the required redistribution of purchasing power for the benefit of those who are worse off and who would otherwise suffer.
The advantage of devaluation is that it sharpens our competitive edge. From now on it will be markedly cheaper for overseas customers to buy British exports. This offers us a great opportunity to increase our overseas sales.
The moment has now come for all manufacturers, designers, salesmen to cash in on the entirely new and favourable conditions which the change in the exchange rate has created in overseas markets. This opportunity needs to be exploited with vigour. This is an advantage that we must keep. It could be frittered away if delivery dates were not kept, quality was not up to standard and large wage claims were made and conceded, which would have the effect of increasing the cost of our goods.
This remains true despite rising prices. Where there are large and genuine increases in productivity this can be reflected in wage bargaining. The Government have already begun consultations with the T.U.C. and the C.B.I. on the existing prices and incomes policy, to ensure that it measures up to the needs of the new situation. As I said in my statement on Saturday, a strict watch will be maintained on dividends.
The primary purpose of this change in the rate is to enable this country to secure lasting and substantial improvement in its balance of payments—of at least £500 million a year. Such a change round would have a profoundly beneficial effect on all aspects of our policy: on our foreign policy, our standing in the world, and our prospects for securing economic growth and full employment. But it would all be dissipated if the inevitable rise in prices were matched by a general increase in wage rates. This is what I meant in July when I said—I will read again what I said:
Those who advocate devaluation are calling for a reduction in the wage levels and the real wage standards of every member of the working class of this country."—[OFFICIAL REPORT, 24th July, 1967; Vol. 751, c. 99.]
The position is this. Without devaluation, during the course of 1968 personal consumption would have gone up, we


estimate, by 3 per cent., but we would have had a substantial—and unacceptable—balance of payments deficit. As I see the situation developing after devaluation, the bulk of the increase in personal consumption that would have taken place will be transferred to exports and we shall get rid of the deficit. This is the price we shall have to pay.
When we come to 1969 we should be able to afford a rise in personal consumption and this will be coupled with a continuing improvement— [HON. MEMBERS: "General Election."]—in the balance of payments. Then we shall begin to feel the benefit of the action we have taken now. Devaluation will start to reduce unemployment, as soon as our exports begin to increase and the exporting industries call for more workers. I expect to see unemployment moving down steadily from the end of the winter onwards. This will not, of course, deal by itself with the problem of regional unemployment where it is caused by structural changes in our traditional industries. And it follows in this, as in a number of other ways, that the Government's policy for strengthening the regions, Scotland, and Wales must continue and be intensified.
We are out for export-led growth. The purpose of this devaluation is to shift the emphasis of production towards exports. I emphasise that this is a shift in the use of our resources and that the reductions in public expenditure and private consumption are intended to make that shift possible and are not deflationary. They will not reduce total production. Indeed, as exports go on rising so total production will increase.
As regards public expenditure, the Government are cutting the expected rate of growth by £400 million. Details were given in the statement I issued. As regards defence, we are satisfied that the reduction of £100 million in the Budget planned for next year can be made within the framework of the defence policies announced last summer. The cuts will involve the cancellation of certain programmes, a reduction in research and development expenditure, certain building cuts and a reduction in stocks, although there will be some offsetting transition al expenditure and an increase

in sterling terms in the cost of purchases overeas and the pay of our troops.
The Government have decided that there should be curtailment in the capital expenditure programmes of the nationalised industries together with other public expenditure of £100 million a year. In the totals which we will achieve there is no padding and no credit for expected short falls in expenditure. Final details will be announced in due course.
The International Monetary Fund has concurred in the devaluation. Moreover, a number of other important countries have expressed their understanding of the necessity of the decision, and many have already announced that they will not be altering the value of their own currencies. The very fact that a movement in the value of sterling causes this worldwide reassessment of the position of individual countries is a measure of the deliberation that must precede the taking of such a step by this country.
The new rate of 2.40 dollars gives us a substantial competitive advantage without leading other countries to follow us. In this sense, the operation of last week has already got over its first hurdle. The Government particularly appreciate the understanding reaction of a number of sterling area countries, the value of whose holdings of sterling has now been reduced in terms of foreign exchange.
Another heartening factor has been the willingness of a number of Governments and central banks to come forward with offers of credit facilities. These facilities are not a loan to us. They are not intended for us to live on nor do we intend to use them for that purpose. They have been assembled as an indication that the international monetary centres of the world are united with us in their determination to put an end to speculation against one of the world's key currencies. A further reinforcement will be the standby of 1·4 billion dollars for which we have applied from the International Monetary Fund, and the total financial resources for this purpose will therefore be around 3 billion dollars.
Mr. Speaker, it was with great personal regret that I came to the conclusion that it was necessary for me to recommend devaluation as an act of policy to the Cabinet last week. But the change having


been made, and the new parity having been fixed, I believe that the House as a whole will agree that, provided we are ready to pay the cost, we have a great opportunity to improve our position, to expand our exports rapidly and achieve a strong surplus with a fully employed economy. That is the Government's purpose.

Hon Members: Resign.

Mr. Iain Macleod: The Chancellor of the Exchequer will be aware that his long statement gives rise to many questions which we shall wish to probe in the two days' debate which, I understand, is to be announced. He will be aware that we do not accept either his diagnosis or his prescription, and that we look forward to debating these.
I put only one point now to him. He quoted, and tried to explain away, one sentence from his speech of 24th July which is an utter condemnation of devaluation. May I remind him that he also said—that if we devalued—and I use his own words:
We should break faith with Governments and private citizens overseas.
The right hon. Gentleman went on to say:
I just do not want either to devalue our own word or to bring down the standard of life of our own people."—[OFFICIAL REPORT, 24th July, 1967; Vol. 751, c. 100–21.]
The Chancellor of the Exchequer will know that I am using his own words. He has done all these things. He has broken faith. He has devalued his word. He is planning to bring down the standard of life of our own people. He is an honourable man. Will he resign?

Mr. Callaghan: I am obliged to the right hon. Gentleman for putting the question so succinctly. I will give him an equally succinct answer. I recommended the Cabinet to devalue. It accepted my advice. It is my immediate responsibility to see that the operation is successful.

Mr. Dickens: Is my right hon. Friend aware that not withstanding one's criticisms of the deflationary aspect of the package, I believe that he and the Cabinet are to be most warmly congratulated on their decision—[Interruption.]

Mr. Speaker: Order. This is an important set of questions. We ought to have quiet. Mr. Dickens.

Mr. Dickens: I repeat that the Chanceller of the Exchequer and the Cabinet are to be most warmly congratulated on making this decisive break with the past, in that the exchange rate will no longer be first priority in Government economic policy. Does not my right hon. Friend now agree that, having taken the decision, it must be fully exploited by having physical controls over prices, mobilising private assets abroad, imposing further restrictions on the outflow of private capital, and making further heavy cuts in overseas defence expenditure?

Mr. Callaghan: That is a contribution that my hon. Friend will no doubt wish to make in the debate, and I will deal with it then. I do not accept the view that the £ has been given first priority: the only question was at what rate we should limit the increase in personal consumption. We were trying to do it over a long period, hoping and expecting—and, indeed, this policy will have to be reinforced—that the restructuring of British industry would enable us to overcome the disequilibrium that has existed for some years.
We have now had to make a sharp break in that policy, and it will have an effect on the standard of living, But, having made that sharp break, we can look forward to a substantial cheapening in export prices, and that should be our salvation.

Mr. Selwyn Lloyd: I am not going to ask the right hon. Gentleman a controversial question at all today, but will he answer a simple question of fact? During these discussions, was an offer made of a loan with or without conditions?

Mr. Callaghan: There were not discussions on an internationally agreed basis. A number of bilateral talks took place, because, as this operation has been carried through in an extremely successful manner—[HON. MEMBERS: "Oh."]—as the reactions of many other Governments has shown. If that arouses incredulity, I quote the contribution of Mr Hubert Ansiaux, the Governor of the Belgian National Bank:
This is the first in history to be accompanied by so much international consultation


and so much care to avoid international disturbance.
I wish to deal with the right hon. and learned Gentleman's question. I was interrupted by the ejaculations of his colleagues. There were a series of bilateral discussions in which countries came forward and offered to put credits at our disposal in order to maintain parity. There were no conditions attached to these. They were the normal banking arrangements that were given. I came to the conclusion that it was irresponsible to go on borrowing on the short-term in this way because I could not see the balance of payments coming right in 1968. It was for that reason, therefore, that I had to come to the conclusion I did.

Mr. Swain: Seeing that countries which supply all our oil are not to devalue and companies which are exploiting North Sea gas are American-based companies, will my right hon. Friend tell the House how devaluation will affect the fuel policy of the Government? If it is to be detrimentally affected, will the Government review the fuel policy more in favour of coal?

Mr. Callaghan: Yes, Sir. I have thought about this problem, naturally. My hon. Friend and the miners will recognise that the effect of devaluation itself does give them the equivalent of a tariff against fuel imports. It makes oil cheaper and coal relatively dearer—[HON. MEMBERS: "The other way round."]—oil dearer and coal cheaper, I meant to say—and to that extent the miners will, of course, derive a benefit from the operation.

Sir E. Bullus: Would the Chancellor confirm that he made this decision a fortnight ago? Could he then reconcile it with the Answer which he gave me less than a month ago, on 24th October, when he gave a categorical assurance that he would not devalue the £ in the months ahead?

Mr. Callaghan: Yes, Sir. No Chancellor can escape this dilemma. I was very well aware that when I gave the hon. and gallant Member that Answer I was putting myself under a suspended sentence of execution.

Mr. Atkinson: The Chancellor said that the measures announced to a large extent depend upon the degree of price

stability achieved during the coming 12 months. With that in mind, will he announce as a matter of earnest policy that so far as commodities and services provided by the Government are concerned there will be no increase in either prices or costs during the coming 12 months?

Mr. Callaghan: I think that would be a large undertaking to give. I would not like to do it without reflection, but, certainly, in so far as goods and services supplied by the Government are not affected by the higher costs of imports, there is no case for an increase in the prices of them and to that extent I can give the assurance.

Mr. Thorpe: Since the immediate alternative is increasing stagnation and unemployment, is the Chancellor aware that many of us accept the inevitability of devaluation while deploring the lack of planning and the mistiming and regard it as an inevitable price to pay for following Conservative economic policies? [Interruption.] May I ask the Chancellor, who no doubt regards this with more seriousness than some Opposition hon. Members do at the moment, whether he does not regard this as the last opportunity to get the economic structure of this country right?
Will he give urgent consideration to immediate tariff cuts to produce greater efficiency before the Kennedy Round, a real effort to get incentives in our taxation policy with particular reference to abolishing the Selective Employment Tax, and a real initiative towards the creation of a European reserve currency so that sterling is never again under these unilateral pressures?

Mr. Callaghan: These are questions which I should debate with the right hon. Gentlemen rather than attempt to give an answer offhand. As to the timing and nature of the operation, outside those who wish to take some party advantage, the rest of the world believes that the timing of the operation and the manner of its execution have been exceedingly well carried out. The degree of consultation that took place with all the major areas affected—[HON. MEMBERS: "On Friday?"] Yes, on Friday.
The degree of consultation which took place has undoubtedly resulted in our


being able to take this step without incurring the hostility of those adversely affected by it and has enabled them to readjust their decisions, or to consider whether they should readjust them in a calm atmosphere. That was well worth Friday, because if we had gone into this with the hostility of the rest of the world and without securing their cooperation as we undoubtedly have done, it would have cost far more than any loss on the exchanges on Friday last.

Mr. Ashley: Will my right hon. Friend agree that, in spite of devaluation, the need for an effective prices and incomes policy, which has been opposed by the right hon. Member for Enfield, West (Mr. Iain Macleod), the need for a viable regional policy, which has been opposed by the right hon. Gentleman, and the need for cuts in military expenditure, also opposed by the right hon. Gentleman, are now more necessary than ever? Would the Chancellor further agree that cuts in the social services which will not be opposed by the right hon. Gentleman will not be contemplated by this Government?

Mr. Callaghan: I am obliged to my hon. Friend for exposing the tawdriness of the Opposition Front Bench in this matter. There is no doubt that the policies the Government have followed so far are not reversed nor made unnecessary by devaluation. Devaluation can only be regarded as a supplement to those policies in every respect, in relation to prices and incomes, to regional investment and the restructuring of our industry. This is the only way in which we shall secure the massive turn-round in the balance of payments now open to us.
As to the social services, they should not be tampered with because there is no need to tamper with them. What we want is a shift in real resources and not in payments or benefits of this character. Therefore, there is no indication, and certainly it is not my policy to recommend, that there should be any major change in social services at this moment.

Mr. Boyd-Carpenter: Can the Chancellor explain how increasing Corporation Tax which, as he knows, falls mainly on companies trading overseas, will help exports?

Mr. Callaghan: Corporation Tax falls on every kind of company, whether it trades overseas or at home. I trust that those companies trading overseas will have very much larger profits as a result of this devaluation so that they may take full advantage of the opportunities offered to them. It is for that reason that it seems to me, in view of the very large increased profitability of industry that is likely to take place over the next 12 months, and in view of the fact that we are asking all sections of the community for sacrifice. we should not put industry in a position where it can make very large, exceptionally large profits in this manner. I want them to make profits, but, likewise, there is every reason why, provided they keep their investment up they too should make a contribution to the task which has to be fulfilled.

Mr. Mendelson: While accepting the export advantages that will accrue and which my right hon. Friend has described, may I ask him to bear in mind that the inevitable increase in the cost of living will bear heavily upon workpeople? If he talks in terms of controlling dividends will he also bear in mind that this is a completely different operation from controlling wages? Will he make quite sure that the group of workpeople who suffer by increased cost of living will share in the increased profits of export trade?

Mr. Callaghan: The best way in which we can increase our share of the profits is by ensuring that we have a large and vigorous increase in our export trade. We can then expand the whole of our industrial production and that will mean a rising standard of life. But for the moment, and in the meantime, what we have to do is to get a shift of resources out of personal consumption and public expenditure into exports.

Sir T. Brinton: Will the right hon. Gentleman explain why most of the measures he has proposed clobber the very people who are to be our salvation, through his proposals for extra Corporation Tax and the withdrawal of the S.E.T. premium, the reason for which was precisely to encourage industry because it is by industry that we obtain our exports?

Mr. Callaghan: The export rebate and that part of the premium to which I have referred have met with considerable international criticism. [Interruption.] Hon.


Members opposite are still intent on making party points, are they? As I was saying, these have met with considerable international criticism of a growing character. Our industries which export will get a substantial price advantage if they choose to do it that way. No doubt they will choose whichever is in their interests. [Interruption.] The international consideration we shall have to bear in mind, if hon. Members opposite will forget their party points for an instant, is that a wave of protectionism is sweeping throughout the world.
The United States Government are having to resist fierce attempts being made to impose tariffs against our goods. If we can remove the export rebate and other items of that sort, it strengthens other Governments throughout the world, including the American, in their resistance to such pressures for additional tariffs because we shall have no particular advanatages of this kind except for the inbuilt advantage that devaluation itself concedes.

Mr. Henig: Is my right hon. Friend aware that there was some alarm over the prospect of co-operation from industry resulting from the remarks of Mr. John Davies, of the C.B.I., on television, immediately after the Prime Minister had informed him of the Government's intention? Has my right hon. Friend in mind any specific plans not merely to encourage industry to take advantage of the better opportunities for exports, but to make it do so?

Mr. Callaghan: I had the privilege, with the Prime Minister, of seeing Mr. Davies on Saturday night and I did not get that impression from anything he had to say to us then and I do not believe that it will be the approach either of Mr. Davies or of the C.B.I.

Mr. John Hall: Does not the Chancellor agree that, despite what he has said, if we are to get full benefit out of the temporary advantage that devaluation gives us, the Government are bound to follow a severe deflationary policy? Is it not misleading to tell the public anything else?

Mr. Callaghan: I am sorry that the hon. Gentleman still has not understood what devaluation involves. It does not involve depressing total production or output, but shifting it. It means using the

opportunity to curb private consumption and public expenditure in order to get thes shift of resources required into exports.
The expectation is that there will be no deflation, that production will rise as exports take up, with an increase in our gross national product. The measures we have proposed, which the House may not yet have fully appreciated, will take effect over a period of nine to 18 months so that the two factors merge in together. This is not an overall deflation in the economy, but something designed to shift resources from one field to another and then, we hope, production will expand.

Mr. Bellenger: Can my right hon. Friend say whether, in fixing the Bank Rate at 8 per cent., his bilateral talks included an increase in the American discount rate?

Mr. Callaghan: Every Government take their own decisions on these matters. Bank Rate will remain at 8 per cent. no longer than necessary to do the job required of it.

Mr. Peyton: Why has the right hon. Gentleman reserved the pillory for himself, since not only did the Prime Minister take personal responsibility for the economy some time ago, but, also, this is the third time on which Socialist policies have brought this country to the humiliation of devaluation? Does not the right hon. Gentleman think that three times is too much?

Mr. Callaghan: We have a system of Cabinet responsibility in this country and I am the Minister who is responsible for both the recommendation not to devalue and the recommendation to devalue and I fully understand my responsibility in that connection.
As for the second part of the hon. Gentleman's supplementary question, I will now tell the House something that I have not said for three years. I now propose to say it if the taunt is to be thrown around that three times is more than enough.
When I had been in office for one month I was approached by a very senior monetary authority in Europe, a person known to everyone concerned with this field, who spoke, as he said, on behalf of the Six. He said that he believed that


we ought to devalue by between 10 and 15 per cent. So if there is any accusation—[HON. MEMBERS: "Oh."]—if there is any accusation—

Hon. Members: Resign.

Mr. Speaker: Order. Noise does not help.

Mr. Callaghan: If there is any accusation that this devaluation is the result of the Labour Government's economic policy, I say to the hon. Member for Yeovil (Mr. Peyton) and to the Conservative Party that it was the view of many distinguished authorities that, when the Conservative Party left office, this country was in a state of fundamental disequilibrium.
I rejected the view that that gentleman put to us. [HON. MEMBERS: "Alibis."] I am not looking for alibis. I am trying to get hon. Members opposite to understand the truth. I rejected the advice then because I believed that it was right that this country should make every effort, through prices and incomes policy and in every other way, to overcome that fundamental disequilibrium rather than take what would then have been regarded as the soft option of devaluation. [HON. MEMBERS: "Resign."] You left us in this state.

Mr. Speaker: Order. The Chair must resist the implication in that last remark —"You" being the Chair.

Mr. Michael Foot: Will my right hon. Friend accept that what many of us wish to see is the speediest possible return to a policy of expansion and the speediest possible curtailment and reduction of the unemployment figures? Since it has become increasingly apparent to everyone—except, it seems, to the benches opposite—that the old exchange rate was a principal obstacle to the achievement of these aims, will my right hon. Friend also accept that many of us rejoice that now we have got this albatross off our necks?

Mr. Callaghan: I am sure that many of my hon. Friends will say, "We told you so".

Mr. Heffer: My hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) did not say that. Accept it in good faith.

Mr. Callaghan: I hope that my hon. Friends will understand. I accept what my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) has said in the spirit in which he meant it. I meant no offence. I need friends at the moment. I have plenty of enemies opposite. I think that the change in the rate, provided we are ready to pay the temporary cost and to maintain our competitive edge, will undoubtedly have a beneficial effect on employment and on production in this country.

Mr. Turton: Has not the Chancellor made an important omission in the measures which he has outlined: the replacement of a substantial quantity of food imports by increased agricultural production? Will he now arrange for a special review to ensure an extra £200 million expansion in British agriculture in the coming year?

Mr. Callaghan: Yes, Sir, I accept what the right hon. Gentleman says. There is a case for reviewing the implications of this on agriculture. My right hon. Friend the Minister of Agriculture has already begun on this and he will, of course, have further opportunities during the Price Review.

Mr. Mayhew: Is my right hon. Friend aware that there will be wide agreement that of the few and difficult courses that were open the decision to devalue was undoubtedly the right one? As to defence, however, does my right hon. Friend recall Ministerial statements that defence expenditure was already at the absolute minimum required to fulfil our commitments? Therefore, will he say how it is possible now to save £100 million without reducing the commitments and, if it is possible now, why it was not possible before?

Mr. Callaghan: My right hon. Friend the Secretary of State for Defence will in due course give full details of the cuts in research and development and in other directions that he proposes to make. They are not particularly welcome to him, but they are a necessary part of the transfer of resources that we need into the export field.

Mr. Ronald Bell: Are the Government now getting rid of their Hungarian advisers?

Mr. Pavitt: Can my right hon. Friend do anything about a special tax on the ill-gotten gains of British speculators who have been gambling on the pound in the last few months?

Mr. Callaghan: So far as they have made capital gains which will accrue to them and be realised in less than 12 months, they will, of course, have to pay Capital Gains Tax on them at the full standard rate of Income Tax. If they accrue over a period of longer than 12 months, they will have to pay Capital Gains Tax at 30 per cent.

Mr. Birch: It is widely reported that the right hon. Gentleman reached his decision a fortnight ago. Can he say how much money was spent in supporting the spot rate in that period, how much was needed on the forward market and what the extra cost of repayment will be?

Mr. Callaghan: The right hon. Gentleman, who has served at the Treasury, would never have dreamed of giving such an answer when he was there, and I certainly do not propose to do so either.

Mr. Shinwell: Will my right hon. Friend realise that although there are difficulties and problems ahead—we appreciate that, and I have no doubt that the Government will tackle them with resolution—nevertheless, as long as opposition is expressed by the other side of the House, he will have the support of this side? The real danger to himself and the Government is of the Opposition supporting him. When that happens, he will lose the support of this side.

Mr. Callaghan: I hope that the Opposition have taken note of that.

Mr. Nott: Will the Chancellor say whether, on Friday of last week—I am not asking for the amounts, as my right hon. Friend has done—the Bank of England was supporting the forward rate in the market after the Cabinet had decided the day before to devalue?

Mr. Callaghan: No, Sir, I am not ready to answer that question.

Mr. Wyatt: Will the Chancellor accept that his conduct over the last few days has indeed won him many friends in many unexpected places? Will he give the House an assurance that he will not rely on voluntary restraint to prevent rises in

wages unaccompanied by increased productivity, but that he will at once introduce legislation to make sure that the value of the action of devaluation is not lost?

Mr. Mendelson: Pay no attention to that. My hon. Friend should speak for himself.

Mr. Callaghan: My right hon. Friends the Minister of Labour and the Secretary of State for Economic Affairs are this afternoon discussing the issues which arise out of this with the General Secretary of the Trades Union Congress and other members of the T.U.C. I would not, therefore, wish to go too deeply into this matter, except to say that the Government do not believe, in present circumstances, that additional legislation in this field would yield us the benefits that we need.

Mr. Sandys: Having been forced totally to reverse the economic policy on which they were elected, is it not the duty of the Government to seek a new mandate from the people?

Mr. Callaghan: That is a matter for my right hon. Friend the Prime Minister. If, however, I may express an opinion, as long as the Prime Minister can command a majority in this House it is to this House that he is responsible.

Mr. Sandys: You are afraid of losing your seats.

Mr. Emrys Hughes: Is the Chancellor aware that anybody who escapes from a straitjacket deserves to be congratulated and that the only wonder is that the Government did not struggle more fiercely before? In reference to the defence cuts, does not my right hon. Friend think that the reason why we were in the straitjacket was that we have gone in for £370 million on a Polaris programme and are spending £1,000 million on American aircraft, and that this is the time to review such things?

Mr. Callaghan: Clearly, overseas expenditure on defence holds us back, but my hon. Friend and the country will miss the truth of the situation if they believe that this is the sole or even the major reason. The basic reason is that we have not been selling sufficient exports which, together with our invisible


income, would put us into balance-of-payment surplus. Until we can get that cost-sales relationship right, we will not get a satisfactory balance. This, I believe, gives us the opportunity of doing so at a very substantial cost to ourselves.

Sir C. Taylor: Will the Chancellor say whether, if we had not indulged in generous overseas aid to the so-called developing countries, if we had not indulged in sanctions against Rhodesia, if we had not had the dock strike and if we had not done away with prescription charges and suchlike, we should have been in the same situation as we are today?

Mr. Callaghan: That is clearly a matter of debate and of opinion, not of fact.

Several Hon. Members: Several Hon. Members rose—

Mr. Speaker: Order. We must move ahead.

Following is the statement:

The Government have decided that, in order to achieve a substantial surplus on the balance of payments consistent with economic growth and full employment, the exchange rate of the £ should be lowered, from 9.30 p.m. tonight, Saturday, 18th November, from 2.80 dollars to the £ to 2.40 dollars to the £, a change of 14·3 per cent.

This change brings with it fresh opportunities —but at a heavy cost. The main opportunity is that our exporters should be able to sell more goods overseas such as motor vehicles and tractors, ships, aircraft, chemicals, textiles and much else. But if we are to derive the full benefit from it we must reduce the growth of demand by consumers at home in order to shift the use of our resources to exports and import saving. We need an improvement in our balance of payments of at least £500 million a year, and the Government intend to ensure that this is achieved.

The banks are therefore being asked to limit bank advances except, of course, to priority borrowers, especially exporters.

Bank Rate is being raised to 8 per cent. immediately.

From midnight tonight the hire-purchase regulations on the sale of cars at home will require a minimum deposit of 33⅓ per cent. and a maximum repayment period of 27 months.

The Government propose to curtail public expenditure in the following ways. Defence expenditure will be reduced by over £100 million next year. Except in development areas, the extra amount received by manufacturers in the S.E.T. premium will be withdrawn, thus saving over £100 million. Other public expenditure including nationalised industries capital

expenditure will be reduced by £100 million. The export rebate, now costing just under £100 million a year, will be abolished, since it will no longer be necessary.

The major disadvantage of the change in the exchange rate is that it will cause a rise in certain prices, though this will not happen all at once. It is essential that price increases should be confined to those unavoidable cases brought about by increased import costs. It is essential, equally, to ensure that these price increases do not result in large wage claims and settlements, for such action would mean that industrial costs would go up once more and the competitive benefits of devaluation would be frittered away.

The Government are, therefore, entering into immediate discussions with the T.U.C. and the C.B.I. in order to ensure that the operation of the agreed policy on prices and incomes measures up to the requirements of the new situation.

A strict watch will be maintained on dividends; and it is proposed to raise the rate of Corporation Tax, due to be fixed in the next Budget, to 42½ per cent.

It is the Government's firm intention to take, at the right time, the steps that will be needed in order to protect the most vulnerable sections of the community from hardships resulting from the change in the exchange rate.

In accordance with the rules of the International Monetary Fund the change in our exchange rate has been notified to the Fund, who have concurred. We have made a formal application to the I.M.F. for an immediate stand-by of 1·4 billion dollars and have been assured that this application will receive prompt and sympathetic consideration. Further credit arrangements have already been made with a number of overseas Central Banks which together with the new I.M.F. stand-by, if approved, will provide new resources of around 3 billion dollars.

By Royal Proclamation to be submitted to the Queen in Council tomorrow the banks in the United Kingdom will be closed to the public on Monday, 20th November. Bank staffs should report for duty as usual. The Stock Exchanges will also be closed on Monday.

BUSINESS OF THE HOUSE

The Lord President of the Council and Leader of the House of Commons (Mr. Richard Crossman): I wish to inform the House of the changed arrangements for tomorrow, Wednesday and Thursday.
It is proposed that on Tuesday a debate should be opened on a Government Motion relating to the Economic Situation and that the debate should be brought to a conclusion on Wednesday, the 3rd allotted Supply day.
The business for Thursday will be the Second Reading of the Administration of


Justice Bill and of the Trustee Savings Banks Bill.

Mr. Shinwell: May I ask my right hon. Friend a question on business? Last Thursday, I ventured to ask him whether it was the intention of the Government to put down a Motion in relation to the fuel White Paper, either to approve the Government's policy or to take note of it. Would my right hon. Friend—

Mr. Speaker: Order. We are not taking that this week. It will better, surely, on the Business Statement on Thursday.

Mr. Shinwell: With respect, Mr. Speaker, you will tell me if I am not in order, but I am referring to business.
As my right hon. Friend has announced a change in business, I want to ask him whether he will make another change, because I understand that after I asked my question on business last Thursday the Government decided that the White Paper will be submitted to the House next Monday and that the House will be asked to approve it. I wanted to suggest to my right hon. Friend that instead of approving the White Paper the House should take note of it. Will my right hon. Friend consider my suggestion?

Mr. Crossman: The statement which I have just made was about business for this week, but I will certainly bear in mind my right hon. Friend's suggestion that we should change what we have already announced concerning the Government's attitude to the White Paper.

Several Hon. Members: Several Hon. Members rose—

Mr. Speaker: Order. I hope that business questions will arise out of the statement.

Lord Balniel: Is the Leader of the House aware that discussion on the Family Allowances and National Insurance Bill, which involves an increase in taxation of £120 million, was to be taken today and was postponed until next Thursday so that the Government could put down Amendments? It has now been postponed, apparently indefinitely. When will the Bill be taken? Are we to understand that the Amendments are drafting Amendments or are connected with the economic situation?

Mr. Crossman: I think that the second assumption would be correct. I suggest

that the hon. Gentleman awaits my statement about next week's business.

Mr. Lipton: As a large number of hon. Members will no doubt wish to take part in the debate tomorrow and on Wednesday, will my right hon. Friend consider the possibility of a little extra time tomorrow night?

Mr. Crossman: We can always consider such possibilities as we go along.

Miss Joan Quennell: Will the Leader of the House say whether the proposals made by the Chancellor of the Exchequer in his statement—particularly the S.E.T. alterations—will involve fresh legislation?

Mr. Crossman: I am discussing business. That is a matter which can be raised in the debate.

Sir C. Osborne: I support the plea made by the hon. Member for Brixton (Mr. Lipton). As many hon. Members on both sides of the House will obviously wish to take part in the debate tomorrow and on Wednesday, could it be extended until midnight tomorrow?

Mr. Crossman: My impression, judging from the number of hon. Members who rose today, is that an extension until midnight would not be sufficient. I suggest that we look at this matter and discuss it through the usual channels, because I want to act to the satisfaction of the House as a whole.

Mr. J. T. Price: The question of fuel and power has been displaced from the agenda by the announcement made by my right hon. Friend. As a great many hon. Members on this side of the House will wish to make critical observations about the policy announced by the Government and will no doubt take the opportunity of doing so by interpolating comments during the debate tomorrow and on Wednesday, may I have an assurance that we shall have on the Front Bench my right hon. Friend the Minister of Fuel and Power to give an adequate answer to the questions which are bound to be raised?

Mr. Crossman: My hon. Friend has forgotten that the business which we were to have had for this week did not relate to fuel and power at all. I announced last Thursday that next Monday we


should start to debate the fuel White Paper—not today, tomorrow and Thursday.

Mr. Bruce-Gardyne: Can the Leader of the House give us an assurance that the Prime Minister will take part in the debate, as many of us are getting a little nauseated by the way that he tries to hide behind the personality of the Chancellor of the Exchequer?

Mr. Crossman: I do not think that it will have surprised anybody on this side of the House to hear that my right hon. Friend the Prime Minister will take part. It might be for the convenience of the House if I state the present intention. It is that my right hon. Friend the President of the Board of Trade should open the debate, that my right hon. Friend the Foreign Secretary should wind up tomorrow, that my right hon. Friend the Prime Minister should speak first on our side on the second day, and that my right hon. Friend the Chancellor of the Exchequer will wind up.

Several Hon. Members: Several Hon. Members rose—

Mr. Speaker: Order. Mr. Michael Stewart.

AGE OF MAJORITY (REPORT)

4.34 p.m.

The First Secretary of State (Mr. Michael Stewart): I beg to move,
That this House takes note of the Report of the Committee on the Age of Majority (Command Paper No. 3342).
The Latey Committee was asked first to consider certain aspects of the civil law relating to people under the age of 21. As it got on with its work it came to the conclusion that if it confined itself to the broad topics within its terms of reference it would not be able to do a satisfactory job. With the approval of my noble Friend the Lord Chancellor, it therefore widened its considerations, and its Report now deals pretty well with the whole of the civil law as it affects young people.
But the Committee made two exclusions. It says explicitly that it has not considered any possible repercussions in the criminal law. It saw its task as being concerned with the great majority of young people who keep the law, and not with the small minority who break it. The other thing from which it deliberately refrained is any discussion of the voting age. It may well be that in due course we shall get an expression of view on this subject from Mr. Speaker's Conference on Electoral Law.
If, after consideration of the various matters raised in the Latey Report, the House or country came to the view that young people are fit to marry without their parents' consent, to enter into valid contracts, and to do all the other things recommended in the Report at the age of 18, it might well be that this was bound to influence the judgment of the House and the public about the voting age.
I draw that point to the attention of the House, but we are not today considering the voting age. The House is being asked at present only to take note of the Latey Report. The Government as a whole find themselves in broad general sympathy with the recommendations of the Latey Committee, including those which were not made unanimously but only by a majority vote. But, clearly, it was desirable to get the opinion of the House first, and that is why we have staged the debate in this form.
We should express our gratitude to Mr. Justice Latey and his colleagues on the Committee for their work. They heard an enormous amount of evidence, because the number of people who have opinions about what young people should or should not be allowed to do is unlimited. They have been thorough in their consideration and have made a large number of recommendations, great and small. Of the 52 recommendations, 44 were unanimous and eight recommendations of major importance were passed only by a vote of 9 to 2. A note of dissent is expressed in a minority Report by two members of the Committee.
The Committee also displayed throughout in its whole approach to the problem that combination of sympathy and common sense which is necessary for a study of the problem. Moreover, it managed to produce one of the most entertaining and readable Blue Books that it has been our pleasure to have for quite a long time. It is full of not only the most thorough study of the problems under consideration, but interesting information on all sorts of matters.
Some publicity has been given, in particular, to the Committee's study of the historical considerations which led to the age of majority being 21 under our law so far. There has been some feeling that we should regard as ridiculous the old reasons why the age of majority was 21. But the two dissentient members of the Committee argued that we should not regard history in that contemptuous light. I think that when our forebears made certain decisions about the age of majority they made them on what were in their day practical and sensible grounds. Those decisions were related to the facts of the society in which people then lived. It was a society in which one's rights and duties were determined to a large extent by the rank or station in life into which one was born.
It was not unreasonable, if one grants that first premise, that the age of majority should be different for different sections of society. Today we live, and are proud to live, in a more mobile society that is not stratified in that fashion and we certainly should not want a different age of majority for different sections of the population. Further, in the early Middle Ages, when hacking one another about

was one of the major occupations of the upper classes, it was quite natural and practical that the age at which one was strong enough to bear and use armour should be the age of majority and that, if one was the son of a merchant, it was not unreasonable to say that one should come of age when one was able to measure cloth and count money.
The point that I am making is that these historical decisions on the age of majority, quaintly as they seem to read today, made perfectly good sense in their own time, granted the facts of the society in which they were made. What we have to ask ourselves is: is our present settling of the age of majority at 21 in line with today's facts in the way that the historical ages of majority were in line with the facts of a previous age? If we decide that 21 is not in line with the facts of the society in which we live, should we make a change and, in particular, should we make the change that the Latey Committee recommends, the change to 18?
Is there any demand for such a change? the two members in the minority on the Committee say—and this is true—that there does not appear to be, either among the population as a whole or among the majority of young people. Although that is true and is a point to be made and considered, I do not find it conclusive. We have found that the public has become more aware, in a variety of ways, of the fact that the keeping of the age of majority at 21 is having certain undesirable results.
There was Press publicity over one or two cases of wardship which brought out a point made by the Chancery judges in their evidence to the Latey Committee, that is, the difficulty in the present day and age of maintaining that someone between the ages of 18 and 21 should be made a ward of court. The public have become increasingly aware of the fact that the legal restrictions on people between 18 and 21 making contracts and being able to carry out certain kinds of property deal are inconvenient and not in accord with the real facts of our society.
I do not think that if this House, after discussion, feels that there is a good case for a change, we ought to be put off merely because polls have indicated that there is no majority for it outside. There are occasions, and alterations of the law of this kind are particularly fitting, when


it may be necessary for the House to take a lead. We should also notice, in this connection, that all the members of the Latey Committee took the view that young people should be able to make a valid will at the age of 18, should be able to own land, fill the office of trustee, should be able to apply for passports on their own, without any question of parental supervision or consent.
Everyone would say that if those changes were made it would be on the whole, a good thing. Yet, I doubt if one could say that there is a great public demand for those changes. People now do not commonly go about discussing the question: should young people be entitled to make wills? It is when they are brought up against some particular case of a responsible young person between the ages of 16 and 21 being inhibited from doing something that, on commonsense grounds they ought to be allowed to do, that people suddenly say how absurd the law is. It is with that kind of thing in mind that we have to consider the question of change
My own general sympathy is with the Latey Committee's proposition that the age of majority should be 18 and not 21. If we are to try to keep in line with the facts of the time we have to ask: have our young people in recent years, or in this century, changed to such a degree that it is sensible to talk about lowering the age of majority? There is very little doubt that they have.
That they have changed in the physical sense is undoubted. Their physical maturity certainly comes decidedly earlier than it used to a generation ago. I know of one famous boarding school which has had to carry out a considerable rebuilding operation mainly because of the sheer physical fact that a changing room that could once be regarded as being a reasonable size for 20 boys two generations ago simply will not contain them today. We all know of more important examples than that which show that physical maturity is coming earlier.
It is an arguable point whether those who mature earlier physically also mature earlier emotionally and psychologically. The weight of the evidence is that on the whole they do, and that our young people are not only physically more mature but are more mature

emotionally and psychologically at the age of 18 now than they were a generation or two ago. That is one great difference, the earlier maturity, certainly in the physical sense, and I would claim in other senses as well.
Further, young people between the ages of 18 and 21 are very much better acquainted with money matters than they were a generation ago. They earn more money, they save on a scale that young people of that age did not a generation ago. They enter into, and make themselves responsible for, monetary transactions of all kinds on a scale not known a generation ago. This is a very relevant point in considering changes in civil law. As I have said, in the old days the merchant's son was considered of age when he could count money and measure cloth. In an age when young people are becoming increasingly familiar, through day-to-day contact, with commercial and business transactions, it is reasonable to ask whether the age of majority should any longer remain at 21.
Another change is that young people are very much more aware of all the things going on in the world, of all the things that there are to form opinions about and all the sources of information. We live in an age in which many more subjects are frankly and fully discussed than was the case in the past. More important still, we live at a time when the amount of serious reading is steadily increasing and where wireless and television are increasing people's opportunity for finding out about all manner of subjects, whether personal relations, management of property and money or disputed questions of public affairs. Another factor that has given young people this greater awareness is that they travel abroad on a much greater scale than they used to. The facts of the present age are that people at the age of 18 are in every sense more grown up than 18 year olds of a generation ago.
One might ask: they are more grown up, but are they better? Of course, it is especially hard for the middle-aged to answer that question affirmatively, because that would mean admitting that they are better than we were at their age, and the middle-aged have never been very willing to admit that.

Mr. Quintin Hogg: Surely, it might be admitting they are better than the right hon. Gentleman.

Mr. Stewart: I will happily let the right hon. and learned Gentleman do that.
A clay tablet dug up in the ruins of Nineveh was carefully deciphered by learned men and it displays to an expectant world that in Nineveh, in 900 B.C., things were not what they used to be and that children no longer respected their parents. A little later, an ancient Roman writer of the first century before the Christian era wrote deploring that young Romans of his day were not as good as those of some century previously and he held it against them, first of all, that they had this nasty habit of going about clean shaven instead of wearing manly beards as the Romans of old used to do and had developed the decadent habit of washing instead of going about as the ancient Romans did, stinking of sweat and manliness.
It is quite clear, I think, that in the eyes of the more cantankerous middle-aged the younger generation cannot win in any age or in any century, and it is exactly that kind of prejudice which we must put aside. We must abandon the idea that, because young people choose to wear clothes, or to have hair lengths which were not fashionable when we were their age, this is evidence of irresponsibility. One must look for more solid pieces of evidence than that.
There was, it is true, one person, not exactly anonymous, but with an illegible signature, who wrote to the Latey Committee suggesting that really the proper age of majority was 50. Of course, it is a point of view that the great majority of mankind are not capable of managing their own affairs. But we cannot run society on that view. We have to maintain that most people are, and ask ourselves, is there really any good reason for excluding the 18 to 21s from that category.
Why do I say that I believe that when we have set aside prejudices and look at serious facts, we must conclude that there is a greater sense of responsibility, a greater power to take responsibility? Well, some of the evidence put before the Late" Committee weighed with me on that. Although there were differences of opinion among the experienced and respected bodies which gave evidence on particular questions, the question of marriage, for example, there was a very

large measure of agreement that by and large this generation of young people are among the very best we have ever had.
I would select particularly the evidence of those extremely sober bodies the Association of Municipal Corporations and the National Federation of Housing Societies. I select them deliberately because nobody can suggest that they had any particular axe to grind one way or the other. Secondly, they do not commit themselves in the newspapers to wide, sweeping pronouncements about our young people and, therefore, they have no particular face to lose by giving evidence one way or another. They meet young people in the conduct of business affairs. They had no interest except to try to get the age right, and I think that their evidence is important for that purpose.
We must notice the very great increase in the extent to which young people pursue education either full-time or part-time voluntarily after the statutory school leaving age. The swelling number of young people voluntarily pursuing part-time education, sometimes at the inconvenience of the loss of immediate earnings, the growing extent to which serious books are borrowed from the public libraries by young people—these are not the kinds of statistics which make headlines in the sense that juvenile delinquency makes headlines, but they are far more important if we want the real picture of what our young people are like.
I think that we should notice, too, the growing concern of our young people to render some kind of public service to the community. I think that it is within the experience of those who come into very close contact with young people that they find even among those of the rougher type who sometimes appear to cherish a strong resentment against the middle-aged and the established, especially where the middle-aged and the established are fortunate and well off, a special sense of sympathy and duty to the more unfortunate members of the community—those hampered by age, or disability of some kind. There is, I think, a very real growth of a sense of social compassion among our young people. I believe, therefore, that if we get rid of prejudice, and look at what


is happening in our society, there is a general presumption that we might move towards a lowering of the age of majority.
I want to say a word about the unanimous decisions of the Latey Committee. I do not propose to spend a great deal of time on them. I imagine that every hon. Member who takes part in the debate will probably have his special interest among the many recommendations which are made. I have already pointed out that there were unanimous decisions to enable young people at the age of 18 to own land, to fill the position of trustees, to make their own wills, to get their own passports. There was a unanimous decision that the law relating to infants and contract should be properly reviewed and be sent to the Law Commission for that purpose. I do not think that anyone acquainted with the subject will doubt that that would be a wise thing to do.
There was also a unanimous decision that young people should be able to give consent to medical treatment from the age of 16 onwards. There was also a unanimous decision—and here I do not think there could be much doubt about its rightness—that the law should stop calling everybody under 21 an infant, and should refer to them as minors, and the Committee says, I think shrewdly, that only people who underestimate the power of words will underestimate the importance of that recommendation.
Among the unanimous decisions, however, there is one group I do want particularly to refer to, and this relates to boys and young men in the Armed Forces. There are three recommendations there particularly, one that a boy who has entered on an engagement in the Armed Forces should be able to get out again on application at any time within six months after his entry. At the moment, he has to do it within the first three months. The recommendation was to extend this period of making up his mind to six. A second was that parental consent should be necessary for anyone under the age of 18 to enter into an engagement of this kind. At present, parental consent is necessary up to the age of only 17½.
As I say, in this debate we are only asking the House to take note of the Report; the Government are not presenting a firm decision; but I do not believe

that on these two recommendations there would be great difficulty in meeting them.
There is a third, more important recommendation about young fellows in the Services that will be, I must tell the House, more difficult to meet. It is that, when a lad who has entered the Army as a boy reaches the age of 18, he should be able at any time between 18 and 18 years and 3 months to get out as of right by applying to do so. That is to say, on attaining what would be the age of majority, if we adopted the Committee's proposals, he should be able to reassess the contract which he entered into when he was under age.
The Committee argues forcibly in favour of the general principle, but I must draw attention to the fact that its immediate adoption would create serious difficulties in manning the Armed Forces and a serious addition to the cost of the training bill of the Armed Forces. My hon. Friend the Minister for Defence for Administration has been making a careful study of this and hopes to make a statement to the House about it. Indeed, as the House knows, he had hoped to make a statement earlier than this, but it has proved a more difficult and complex problem than at first appeared, and I must leave it for the present by saying that my hon. Friend will make a statement as soon as he is able.
I turn now to the disputed points in the Latey Committee's Report, and I will pick out two. The first is the one concerning marriage, and the second is the one concerning contracts. I believe that it is on those two that most of the argument turns.
As the House knows, someone under the age of 21 who wants to marry at present has to get either his parents' consent or, if the parents' consent is refused, permission from a magistrate providing that the magistrate feels that the parents' refusal was unreasonable. The proposal supported by nine members of the Committee is that that should only be so up to the age of 18, instead of 21. The point at issue then is what view we take about the fitness of young people between the ages of 18 and 21 to enter into marriage just as anyone over 21 can.
If one tried to assemble the names of impressive organisations as brickbats to hurl at the other side in the argument,


both sides would have a heap of quite respectable brickbats to throw at the other. In the last resort, we shall all have to use our own judgment about it.
One of the great and very natural anxieties of those who want to keep the age at 21 is that it is not disputed that what I might call the "failure rate" among marriages entered into by people aged 18, 19 and 20 is exceptionally high, and one might well ask if we want to make marriages of that kind easier. But we have also to notice that these marriages, with their high failure rate, are not prevented by the present law. There is clear evidence that the two barriers of parental refusal and consideration by a magistrate do not rule out the entering into by young people of a number of unsuccessful marriages. Not only must we ask if the young man or girl really knows best, but if we are really sure that their parents know any better.
Sometimes the refusal of consent by the parents is motivated by something which is not in the best interests of the young people. I do not suggest that it is always so, but it is quite possible and it does occur. Parents may want to keep a girl at home, where she is very useful. They may not want to lose the companionship of their children. There are a large number of motives which may lead pa rents to refuse their consent to a marriage.
The very fact that the failure rate is high suggests that we have not found in our present law how to prevent young people from making imprudent marriages. We have not found an answer, and I think it doubtful that the human race ever will.

Mr. A. P. Costain: Has the right hon. Gentleman any statistics of the failure rate where the parents' consent was given, as opposed to where a magistrate intervened?

Mr. Stewart: No, I have not, and, as far as I know, they do not exist. One would want case histories of what has happened to young people whose parents said "No" and a magistrate said "Yes", and, still more, what has happened to the young people where both the parents and the magistrate said "No", but I suppose that one could never get those. However, it is not until we know more

about these matters that we can make any pronouncement. It may be that there is just as depressing a record of low success among couples who in the past were forbidden to marry as among those who were allowed to marry. As the parents of Juliet discovered, the trouble is that young people have a tiresome habit of falling in love with other young people without necessarily following their parents' advice or wishes on the matter. It might have been better if Juliet had been a good girl and married the Count of Paris, as her worldly-wise parents wished, although the world would have lost a great deal in the realm of literature. However, I had better not pursue that line of argument any further.
The serious point is that it is not conclusive to say that many young marriages are unsuccessful. It is an unhappy and important fact, but it is far from proved that requiring parental consent or a magistrate's consent for anyone under 21 is any safeguard against more unhappy marriages. We have to consider what view we take, by and large, of young people between the ages of 18 and 21. Some of them will contract imprudent and unhappy marriages. Some of them will enter into foolish contracts. For that matter, so will a number of people over 21, 31 or 41.
Those who dislike the idea of bringing down the age of what is called "free marriage" from the age of 21 to 18 are concerned that one should not thereby weaken the authority and influence of family life. That is again an understandable and natural anxiety. But we have to ask if the character and whole atmosphere of family life is really improved by parents having a legal veto in the background at an age when, for so many purposes, young people are already treated as if they were adult and have begun to think of themselves as adult.
There is a shrewd comment on this whole aspect of the matter in paragraph 71 of the Report:
…we feel extremely strongly that to keep responsibility from those who are ready and able to take it on is much more likely to make them irresponsible than to help them.
It may be that the influence of the family and parents is best exercised by persuasion and affection when the people have reached the age of 18, without the legal


compulsion in the background. Hon. Members must finally use their own judgment on this.
There is also the question of wardship and whether people between the ages of 18 and 21 should any longer be made wards of court.

Mr. Daniel Awdry: As I understand it, the right hon. Gentleman agrees that it would be wise to bring the age down from 21. Has he given any thought to bringing it down to 19, say, rather than to 18?

Mr. Stewart: I have, but I have been trying not to pursue all the possibilities. One could go on doing that for ever. I found myself very much in agreement with the Committee's view. It argued the age of 19, which, it says, was a clear Second choice, and on balance I think it is right. There is a point in paragraph 125, page 40, where it brings out for how many purposes 18 is already regarded as an age where a person is nearly adult.
I do not propose to say anything about wardship beyond mentioning it, because it and a number of other fascinating legal questions will no doubt be referred to by my hon. and learned Friend the Solicitor-General. If the Committee's recommendation on marriage is followed it would have to be followed on wardship, because it would create an anomalous situation if one was legally free to marry at the age of 18 but could still be made a ward of court at that age. The one decision probably hangs on the other.
The other important matter was that of contracts. We all know that just as people of all ages can contract imprudent marriages, people of all ages can and do enter into contracts to be provided with poor quality encyclopaedias for a price they cannot afford, or whatever else some smooth-tongued person has persuaded them into signing. We can tackle this problem partly, as the nation and Parliament have been doing, by looking at the law on contracts of this kind as a whole as it affects adults signing them to prevent excessive influence, sharp practice, and so on.
My own feeling is that if it can be shown that a number of people between 18 and 21 are entering into undesirable contracts

of this kind, the remedy is probably again to have a look at the law on contracts as a whole. But I do not believe that this is the case with contracts concluded by young people. It is true that young marriages do not appear to be as durable as marriages contracted by people of riper years, but there is no evidence that people between 18 and 21 more frequently enter into imprudent contracts than people of more advanced age.
There are some people—we all meet a few of them probably in our constituency surgeries—who never seem to be able to grasp the fact that if they sign their name promising to do something, they will be expected to do it. Some people just do not seem to grasp this, however, many years go by.
We have to ask ourselves the question: is there any valid reason for regarding people between 18 and 21 as peculiarly in need of protection here? This was why I laid stress on the evidence from the housing societies and town clerks, because that was evidence that bore on young people in business transactions. I should have thought, therefore, that there was a case for agreeing that, by and large, 18, rather than 21, should be the majority year.
In paragraph 125, page 40, the Committee remarks:
18 is already an important watershed in life. To mention some examples of the freedom attained at this stage, at 18 you become liable for full National Insurance contributions; liable to military service when there is conscription; able to drink alcohol in public; no longer liable to care, protection or control orders; free to carry on street trading; and, of course, you can apply for a commercial balloon pilot's licence. And by 18 you can drive a car or motor bicycle, be treated as an adult when in need of treatment for mental disorder and choose your own doctor and dentist within the National Health Service. In a sentence, at 18 young people nowadays already become emancipated for many purposes of their personal and private lives and are free to order them as they will.
I do not think that it has been possible to show that people between 18 and 21 are seriously unfit for any of the powers of choice mentioned in that paragraph, or others.
I am led to the view, therefore, that 18, rather than 21, is the age at which we could say people can enter into a valid contract.
I have mentioned marriage and contract. I pick those because, if one agreed


with the majority of the Latey Committee on those two, it would be difficult then to say that a young person cannot have an independent domicile at 18, which was another of the disputed points, or that a young person cannot engage in a law suit without what I believe is called a guardian ad litem.
The first recommendation, which was one of those that was not unanimous, that the general age of majority should be 18 rather than 21, would really follow on what decision one took about marriage and contracts. If one agreed with the majority on those two and added them to the many unanimous recommendations, then I think the simple recommendation, that in general the age be 18 and not 21, would follow inescapably.
I have not disguised the fact that the Government's sympathies lie with the majorit2, of the Committee on the disputed points. I thought it would probably be more helpful to the House if I made this clear than if I tried to give merely a jejune weighing of the pros and cons without expressing an opinion. But I want to emphasise that this is a debate to take note, and perhaps we might remember that while we are sitting here taking note of the Latey Committee's Report, the huge majority of hardworking, healthy, useful young people will be carefully taking note of how we acquit ourselves in this debate.

5.18 p.m.

Sir John Hobson: I think that I should begin by declaring an interest. I have an unmarried daughter between the ages of 18 and 21 and three grandchildren in whom I may have a contingent interest in their future marriage and contracts. For that reason alone, I have been greatly interested in the Report which we are now debating.
In some sense, to debate this subject today is rather like fiddling while Rome burns, with the tremendous events which have been occurring over the weekend. Nevertheless, I agree with the First Seccretary of State that this is a topic which is of very widespread interest to a very large number of people indeed, and in every generation the numbers of those who are approaching the point where they take full responsibility for their own

lives is bound to be a high proportion of the population as a whole.
I entirely agree with the right hon. Gentleman that we are not today debating, and the Latey Committee was not concerned with, what is, I think, the major topic that interests most hon. Members, namely, the age at which citizens should have the right to vote. This was not included within the terms of reference of the Latey Committee. Indeed, it is entirely a matter for the Report of Mr. Speaker's Conference on Electoral Law. We shall read that Report on this topic with great interest when it comes out. But the Latey Committee was very careful indeed to make clear, in paragraph 25 of its Report, that it did not regard its own recommendations as relevant to the wider political question, namely, the age at which an individual should begin to have the right to vote.
Paragraph 25 on page 17 says:
But it does not seem to us that changes in the civic field are at all likely to follow changes in the private field even if we wished that they should. It is a very diffierent thing to cope adequately with one's own personal and private affairs and to measure up to public and civic responsibilities.
That is the point at which the minority disagreed with the majority, and it is the point at which I, too, disagree with the majority.
I think that the main question is, what is the age at which the majority of young boys and girls reach a maturity in which they are capable of taking charge of, and being responsible for, not only their own affairs and their own future, but civic responsibility for the future of other people, if they are to vote or to serve on a jury or to carry out the many other important duties which fall on a citizen and which affect other citizens?
To that extent, those who wish to derive some answer to the question, "At which age should citizens begin to vote?", do not get very much comfort, because the majority say that their answer, which is that 18 should be the age of voting is not relevant to the discharge of civic duties, while the minority, who say that they want to retain 21 as the age of majority and not reduce it, say that the two are inter-related. Therefore, anybody who wants to use this Report to say that the age for voting should be brought down is in a difficulty. He can only get


part comfort from the majority, and part comfort from the minority, and if he is to back either one or the other he will find himself either not reducing the age, or in a position in which it is irrelevant to consider the conclusions on the age of voting.
One of the things that interests me about the Report is the comparative law table at the end, which shows very clearly what is done in many other countries. I join the right hon. Gentleman in thanking and congratulating the Latey Committee on this admirable Report, on the enormous amount of material which it assembled, and on the extremely lucid and readable way in which it has been put before us. It has been a pleasure to read the Committee's comments, and the careful analysis of the evidence. I recommend this Blue Book—something which I have never done before—for general reading by anybody who is interested in this topic.
There is, I think, an unfortunate lacuna in Appendix 7 in that it does not deal very extensively with European countries. If we are contemplating joining the Common Market and wish to think in a European way, it would have been very helpful if this appendix had contained details about all the countries of the Common Market. I can find details only about France, West Germany, and Italy. It may be that I have not read it fully enough, but the Netherlands, Belgium, and Luxembourg seem to be omitted, and one does not know what the rule is there.
Nevertheless, on the material provided by Appendix 7, it is plain that in Italy, France and West Germany the general age of majority is 21, and that the age for voting is also 21, and that therefore, as the minority say in the Report, in all the countries within the European tradition there is no country where the general age of majority is lower than 21, and that in nearly all of them the voting age is 21.
The only country that I can find where the voting age is lower than 21 is the Soviet Union, and in a number of American States—Illinois, Kentucky, Idaho, and Dakota. I do not regard these as good precedents for the conditions in which we live. It is also interesting to notice that Japan is one of

the only other countries in which the general age of majority is lower than 21. It has a general age of majority of 20, and so does Hawaii. This does not appear to me to indicate that the general experience of other civilised communities is that the general age of majority ought to be lower than 21.
The trouble about having a general age of majority is that it is entirely arbitrary. We all know that there are many people who, as the right hon. Gentleman said, are extremely foolish throughout their lives, however old they are, and there are some young people below the age of 21 who are wise, sensible, mature, and responsible. We are asked to fix an arbitrary date to apply to everybody in the group between 17 and 22. We know that applied generally over the whole community it would be absurd for some people aged 17 or 18, and for others of 22 or 23, to be given complete personal responsibility, or complete civic responsibility.
We have to fix an arbitrary age. It has to be one which, as far as possible, approximates to the average individual to whom it is intended to apply, and we can all remember the sad story of the American who was drowned crossing a river which he had accurately been informed had an average depth of 2 ft. One of the inevitable difficulties facing any legislature is that one has to fix an arbitrary date which is intended to represent an average. Everybody knows that the average individual seldom exists, and that when he does the last thing that he should be told is that he is the perfect average.
We are grateful to the right hon. Gentleman for telling us the Government's general approach, but he said singularly little about what the Government intend to do by way of implementation. The only subject with which the right hon. Gentleman dealt was that of young men of 18 who joined the Armed Services. Their position is to be slightly improved, but even this is subject to a statement by his colleague from the Ministry of Defence.
The right hon. Gentleman has not said a word about the large number of recommendations, many of them agreed, which require either legislation or Government action. I hope that when the Solicitor-General winds up the debate he will give


us a little more information about the Government's intention with regard to many of these important matters which will affect the administration and procedure of the courts, and the way in which the law affects not infants but minors.
I think that the Latey Committee has shuffled some heavy burdens off on to the Law Commission. First, it is to try to draw a law of contract for minors which will assimilate the law of England and Scotland—no easy task in any event, but one that I welcome. It is absurd that the law affecting contracts made by infants on either side of the Border should be different. Further, considering the great amount of postal marketing and the great amount of sales from newspapers that go on at present it is absurd that there should be a difference in this law on either side of the Border.
I wish the Law Commission well in its task of codifying the law of contract and, in the process, assimilating the law of contract relating to infants on both sides of the Border. I should be grateful if the Solicitor-General could inform us what progress is being made by the Law Commission in that task.

Mr. F. J. Bellenger: The right hon. and learned Gentleman has mentioned the difference between the status of the infant and the mature person on both sides of the Border. Will he speculate on the position internationally, as he has already mentioned that within the European Economic Community there are differences in respect of the age of majority? Might not that fact bring impediments into the negotiations that we are now assuming to try to get into the Common Market?

Sir J. Hobson: I agree that the question of the assimilation of the law concerning the general age of majority and the right to contract should be considered in a European context, and that it might well cause difficulties if we tried to get into the Common Market. If people in this country have the vote at an age which is different from that at which people vote in Europe, and there is a difference regarding the right of infants to contract, I foresee considerable difficulties arising. It is therefore very important to try to get the law in the United Kingdom on the same basis in this respect. I also

hope that it would be possible to arrange with the Common Market countries for some assimilation of the law there. But that raises a wider issue than the terms of reference of the Latey Committee.
The other matter concerning the Law Commission in respect of which the Solicitor-General may be able to help us is related to the recommendations set out in paragraph 269 of the Report, on page 73. These are detailed recommendations. Incidentally, of the 46 agreed recommendations we do not know how many the Government intend to implement. I hope that the Solicitor-General will be able to help us on that point. Paragraph 269 contains many jurisdictional and procedural points for the courts in dealing with minors or infants, and many of those recommendations were for consideration by the Law Commission. I should be grateful if the Solicitor-General could tell us how that consideration is proceeding.
One of the most important of the other tasks of the Law Commission was to consider the proposal for family courts, not only in the High Court—in terms of the division of responsibility between the Chancery Division and the Probate, Divorce and Admiralty Division—but also in magistrates' courts. How is the Law Commission getting on with that consideration? From its last annual report I understand that it is waiting upon the conclusions of the Beeching Commission on the organisation of the courts generally. Can the Solicitor-General tell us whether the Law Commission favours the idea of family courts generally, both in the High Courts and in magistrates' courts, and what progress is being made along those lines as suggested by the Latey Committee?
The Minority Report is much more cogently argued, and comes much nearer the problem, especially in its insistence that we must look at civic responsibilities. It points to many civic responsibilities and says that many Commissions and Committees which have considered the problem have come down on the side of 21 as being the right age of general responsibility for civic matters. The youth employment service, the Morris Commission on Jury Service and many other bodies have recently investigated this matter from a quite independent


point of view and, together with the Wolfenden Committee, have all come down in favour of the age of 21 as being the age of maturity or responsibility.
I appreciate that they may have favoured that age because it was at that time the general age of majority under the law. Nevertheless, they had a great deal of evidence and they still came down in favour of 21 as being the milestone at which an individual should begin to undertake heavier and greater civic responsibilities.
We should not divorce the general civic responsibilities of a citizen and his personal right and responsibility, on maturity, to run his own life both in respect of getting married and in making contracts. I believe that the Law Commission is also to consider the proposal of the majority of the Committee that most contracts should be binding on a minor but that, on terms somewhat similar to the Scottish system, the minor should be able to seek to show that it was an unreasonably harsh bargain for him, in which case the court should have a discretion to relieve him of it on the basis that the parties are put back in their respective positions on the doctrine of restitutio in integrum.
I am attracted to Appendix 5. There is much to be said for the Scottish system. In this respect I have had the help and advice of my hon. and learned Friend the Member for Edinburgh, Pentlands (Mr. Wylie), who regrets that a public engagement has kept him from being here to talk about the Scottish position. Certainly English and Scottish law should be assimilated, and I hope that we shall to some extent go along the route that Scotland has adopted for minors, as it seems to be based on good sense and practical provisions.
When discussing this topic we should remember what narrow terms of reference the Latey Committee had. It was asked to consider only four major problems —marriage, with or without the consent of parents or a court; the age at which it should be possible for the Chancery Division to continue to deal with people as wards of court; the ability to make binding contracts and the liability to be bound by them when made, and the problems of owning and disposing of property.
In considering those points the Committee rightly took the somewhat broader view of thinking that it would be more satisfactory if each problem could be solved upon the same view of the maturity and responsibility of young people.
I am very attracted by the congency of the arguments put forward in the minority Report, especially on the question of parental or court consent for marriage. The minority Report is much more acceptable when it refers to the present provisions of the law as a buttress to parental authority rather than a knuckleduster. It is much nearer reality to say that the present position is akin to a buttress of parental authority, something which is desirable and which has probably been of assistance in preventing improvident marriages by young people who might have spent the rest of their lives in misery. Indeed, some of the letters from young ladies show how grateful they were to their parents for preventing them entering a marriage the thought of which makes them shudder when they look back at the age of 22 to what they thought was their ideal at the age of 19. I found some of these letters very impressive.
In one newspaper the other day there was a surprising account of how, in many countries where marriages are arranged for young people, the divorce rate is far lower than where romantic love is the foundation for marriage. I certainly do not think that it is right that all parents should arrange marriages for their children. I would regard the obligation to arrange marriages for my daughters as an absolutely horrifying liability which I could not afford to undertake.
All the same, parents probably can usually give better advice than most other people. I entirely agree that there are very stupid parents and that many are wholly irrational and unfair about the marriage of their children. Nevertheless, generally, parents probably are the best people to advise their children upon their marriage and the present provisions of the law give some buttress to useful and wise parental authority. The idea that to support that authority is to put a knuckle-duster in the hands of the parents and thus destroy family life is unreal and absurd.
This Blue Book contains a mine of information and views which one could


discuss for many hours. I certainly do not intend to do that. I am glad that we are having this debate on this of all days, when the Foreign Secretary, according to his own information, has been asked to become an honorary member of the Bitter Lakes Association, and when the £ has just been devalued. It must be a little sour for those on the Government benches to have to contemplate that the period of life under discussion today should be 18 or 21 years, especially when they reflect that 18 years is the period between 1931 and 1949 and between 1949 and 1967. It cannot be a very happy period for hon. Members of the Labour Party to have to contemplate for any purpose.

5.43 p.m.

Mrs. Winifred Ewing: I have the honour to represent in this House the constituency of Hamilton. My predecessor represented that constituency for 24 years. In a long campaign, I found that thousands of my constituents had met my predecessor personally and many spoke of him as a man who had actually solved a problem for them. They made it plain to me that the only way for any M.P. to stay in Hamilton was to give the kind of service which my predecessor gave, personally, diligently and patiently. Although I have never met him, I would begin by paying tribute to him.

Hon. Members: Hear, hear.

Mrs. Ewing: My constituency is a rather good cross-section of the country that I come from. It has all the usual shortages in it and, I am happy to say, many young people, of the calibre which makes thoughtful people get together and formulate a Report like the one before the House. I found them intelligent, selfless and ready to help. I did not find them delinquent. I have studied delinquency statistics and it is worth mentioning that, although the dangerous age for boys is said to be up to 17, the dangerous age for girls—if one can use that term—is between 35 and 45.
I was interested in the speech of the right hon. and learned Member for Warwick and Leamington (Sir J. Hobson). Perhaps I may tell the House the story, which hon. Members may know, about the Lord Advocate of Scotland who had a conversation with the Lord Chancellor of England. The Lord Chancellor said,

"Would it not be a good thing if the laws of our two nations were the same?". The Lord Advocate replied, "Yes, it would, but would it not be awfully hard to persuade the English to adopt Scots law?" That is where I stand. It is regrettable that, for the present—I hope that it will not be for too long—we do not have Scottish Law Officers in the House.
I am pleased to say that I was a lawyer before I began trying to become a politician and I did not understand that the purpose of the Scottish Law Commission was necessarily to assimilate the law on anything with the law of England, with the co-operation of the English Law Commission. I understood, as does the legal profession in Scotland, that the purpose of the Scottish Law Commission is to find the best possible law. That is what we in Scotland, being a logical nation, like to do. In looking for the best possible law, we may indeed assimilate, but all too often I am aware, as a lawyer, that the English law and the law of logic are two different things. So this assimilation does not necessarily follow.
Hon. Members may wonder why I am "putting in my oar" so early, when the Report under discussion affects England and Wales. In the absence of Scottish Law Officers, I would say that there are always two dangers when English private law reform is on the agenda, and one is almost as had as the other. The first is the danger of Scotland being included and the second is the danger of Scotland being excluded.
The first danger sometimes results in unsuitable afterthought Clauses and interpretation Clauses, about which the best that one can say is that they provide good work for the legal profession. As to the second danger, of Scotland's being excluded, it is a pity that, when a very good reform takes place in England, we have sometimes to wait a long time between the Acts for it to take place in Scotland.
I congratulate the Committee on travelling part of the way on a road which Scotland has been travelling almost since the Reformation. As a lawyer, one finds that, when English law reform is proposed along lines as drastic as these they lean very heavily on the bank of fundamental common sense called Scots law. Since the Reformation, we have been free


to marry and to leave home at 16 without parental consent. We suffer few contractual restrictions from the age of puberty, though it is true, as the right hon. and learned Member for Warwick and Leamington said, that we still enjoy some protections between puberty and the age of 21. We have a more sensible word—"minors"—for this period than the word "infants".
Whatever is decided in the end by the House, may I make a plea for the law to be made as simple and as readily knowable as possible. A great number of examples have been given of its complexity—the different ages for driving cars, being in the army, betting and drinking. One can commit a crime at the age of 8, be sent to prison at 17, and, before the unenlightened law was changed, people could be hanged at 18. I read also about the age for a commercial balloon licence, but that affects no one in my constituency. One cannot become a juror until the age of 21 but can be a witness at 14, will all one's money away in Scotland at the age of 14 but must wait until one is 21 to will one's house away. One may leave home at 16, marry at 16 but may not sign a consent for an anaesthetic at 21 and one may vote at 21. I learned from a previous debate on the subject—it was about all I learned—that one can attend horror films at the age of 16. I confess that previously I did not know that.
It seems to me to be desirable to strike an age. It may be that for some purposes it would not be ideal, but it would be excellent if everyone knew where they were, because the legal landscape at present bristles with all these difficulties.
It has been suggested that there is no demand for earlier marriage with consent in England or for earlier ability to make contracts. I understand that one in four people marry in England under 19, which seems to me to be evidence of the demand, better than any evidence that one could get. What of divorce? As someone who can describe herself rather unfortunately as a "divorce lawyer", it is my belief that the principal causes of divorce are not youth but drink, violence and poverty. Those causes are usually behind desertion.
I therefore make a plea that the law should be made simple and easily know-

able. It is illogical to have all these different ages. It used to be said that if a person could fight, then he was entitled to vote. Youth today are not only physically mature sooner but they are politically mature sooner. Hon. Members may say that I am prejudiced when I say that, because of my party, but evidently they believe it to be true in Scotland.
There are moral and intellectual reasons why it is good sense to make people responsible at the age of 18 if not sooner —and I mean fully responsible in every sense of the word. They are becoming less inclined to follow their parents' way of thinking and they are more able to earn. They have seen the world on the television screen, and the visual is more compelling than reading. They have a very good understanding of what the world is all about. There is a revival of interest in politics. I am sorry that the Report does not talk about voting at 18, because that is in the minds of everyone who considers this matter, but if we go as far as the Report recommends, then voting at 18 may well be the logical next step.
I am absolutely on the side of youth. I would remind the House that even if we give the vote at 18, the average age at which the first vote is cast is 21, and if we give the vote at 21, then the average age at which it is first cast is 23. Mr. Pitt was a good Prime Minister, so it was said, and he was only 23, so that today presumably he might not even have had a vote and could not have been Prime Minister.
I ask hon. Members to think well of the Report, as I do. I have a few reservations about the way in which some of these proposals will be applied to Scotland, but I believe that the result of giving more power and the vote to young people will be to hasten the day when I shall be fortunate enough to have some colleagues to join me here from the party I represent.

5.55 p.m.

Mr. Robert Maclennan: The pleasant task falls to me of felicitating the hon. Member for Hamilton (Mrs. Ewing) upon her maiden speech. It is a matter of particular satisfaction that as a lawyer and as a Scotswoman she has chosen to make it on the subject of the reform of the English law.


It is a matter of particular satisfaction that attention has been drawn to the implications of the English law for the law of Scotland by an hon. Member as well aware of it as she is. I hope that she will continue to give us in the House the benefit of her legal expertise.
We are all aware that young people today are the focus of more public attention than at any time in our nation's history. The increased economic independence of young people, the extension of educational opportunities, the rather self-conscious attempts of our society to understand the social and psychological needs of young people have all contributed to the expansion of their horizons and have increased their scope for self-expression. The day has passed when it was felt to be the natural order of things that young people, depending on to which class of society they belonged, should be set to work as young as possible for as long as possible for as little as possible or bound for many years in a needlessly protracted apprenticeship or confined to unrewarded years of hard labour to mount the professional ladder.
To the great credit of our society, much has been done to liberate the energies, the imagination and the idealism of our youth. Some of the consequences of the natural experimentation of young people may not be as pleasing to everyone, but it is my personal point of departure in the debate that not only young people but our society as a whole have benefited from the earlier opportunity of each individual to develop his needs and express his aspirations. I imagine that all who feel as I do will have welcomed the opportunity provided by this Report to look at the law as it affects our young people.
That we should be the first country to do so, the first country to embark on a systematic study of these problems, need not fill us with foreboding, and I do not share altogether the views of the right hon. and learned Member for Warwick and Leamington (Sir J. Hobson) on this matter. Still less do I feel that we should be overcome with a sense of our own temerity in recommending changes in the law referring to the age of majority. We are not accustomed in this country to look for a lead from abroad when it comes to recommending changes in our

domestic laws, particularly when these laws touch upon conditions in our society which may find no counterpart in other foreign countries.
The work of the Latey Committee, of which I had the honour to be a member, has, I believe, attracted a considerable amount of interest in a number of other countries, particularly those deriving their law from the Common Law tradition, and during the course of our deliberations we received interested inquiries from those countries. The recommendations of the Committee fall broadly into two categories. First, there are those concerned with determining at which age the law should allow young people full legal capacity in the special fields of marriage, wardships, contracts and property. Secondly, there are those recommendations which are concerned with making detailed recommendations for changes in the law as it affects young people, regardless of what age may be settled as the age of majority.
Although the main controversy will probably surround the proposal of the Committee that the age for full, legal capacity should be lowered to 18, it bears emphasis that of the 52 recommendations made by the Committee, 44 of the proposals for changes in the law affecting young people were unanimous. Some of these proposals are of considerable importance. Their implementation would serve not only to remove anomalies, uncertainties and obscurities in the law—for example, by the repeal of the almost universally disliked and certainly universally misunderstood Infants Relief Act, 1874—but would rectify certain intolerable restrictions on the freedom of young people. In this context, I draw particular attention to the proposals of the Committee in regard to the rights of boy entrants into the Armed Services.
I was interested in the points made by my right hon. Friend about the view of the Government towards these proposals and I stress for his attention, and that of the Secretary of State for Defence, the fact that the Committee found unanimously that there were not cogent reasons of national interest which justified the present injustice and severity of the law. I hope that this will be firmly borne in mind before any announcement is made to the House about any possible watering down of the Committee's proposals.
If I concentrate today less on the proposals for changes in the law as it affects young people it is not because I do not regard them as of great importance and usefulness—and of a kind which could be speedily implemented by Parliament; and, to a large degree, proposals of little controversy—but because I prefer to focus on what I believe to be the central recommendation of the Committee; that the age of majority should be reduced to 18.
It will undoubtedly be argued that the onus of persuasion in this matter rests on those who advocate this change, I fully accept this burden and I believe that it has been discharged by the Committee. I will, therefore, rely on the arguments adduced by the Committee at great length, and I will not cover the ground covered by the Committee or enlarge at length on the points made by my right hon. Friend, with which I entirely agreed.
When first considering this question, one has probably already formed a view about the central proposal. As we said in our Report, a number of members of the Committee had formed views themselves before considering these matters. Indeed, some of us felt obliged to reconsider our position in the light of the massive amount of evidence put before us.
This further point bears emphasis. We are all well aware of the need to protect the immature members of our society, although we do not always pay sufficient attention to the risk of over protecting those who are ready to assume the responsibilities of life. We are not always ready to recognise the real frustration—about which the Committee had masses of evidence—caused by the confinement of the law on those who are ready to exercise their judgment in matters which more intimately affect them than they affect society at large. I refer to such matters as buying a house, purchasing consumer goods, leaving a will or choosing a partner for life in marriage.
I do not feel at liberty to follow too closely the arguments of the right hon. and learned Member for Warwick and Leamington about the inter-relations of the Committee's proposals in the civic and private spheres. Being a member of Mr. Speaker's Conference on Electoral Law, I am inhibited from canvassing the

argument at present being considered by that body. However, it is proper for me to re-emphasise the view of the majority of the Committee that the question of the capacity and aptitude of an individual to determine and order his private affairs does not necessarily influence the view one may take of his capacity or aptitude to exercise his public responsibilities and rights.
This subject was clearly outside the terms of reference of the Committee, but it wished to make it clear—and this was done in paragraph 25 of its Report—that consideration of the civic implications of the question of the age of majority should not prevent, inhibit or retard consideration of whether or not there was a need for change in the private, civic, civil law.
On all the matters which were principally the subject of consideration by the Committee, I stand by the arguments advanced by the Committee, although there are some arguments against change which call for rebuttal. The first and most easily disposed of is that there is no demand for change. The evidence of the opinion polls has been cited as some proof of this. I take this as being little more than the natural response of those who, for the most part, have not encountered the trammelling effects of the law as it stands.
It is natural that if one is stopped in the street and asked, "Do you think the present age of majority is the right one?" if one has not encountered any difficulties, or such difficulties do not exist in one's immediate experience, one will not think that there is a crying need for change. However, more weight should be given to the opinion of those who have encountered such difficulties, and, indeed, to those who have considered this matter.
It was pointed out by the Minority Report—I do not propose to chop and change arguments with the minority on this—that a majority of young people favoured the law as it stood. Of more significance in this context is the fact that a decisive majority, of two to one, of those young people who considered the question, who wrote to the Committee and who gave evidence, favoured a reduction in the age to 18.
On this point of evidence, the Committee did not at any time argue that there


was a consensus about the need for change. It would have been impossible to do so. Such a matter as this is not susceptible to an approach of that type. However, it did argue, I believe with justification, that the widest evidence was submitted in support of change. It is also of significance to note that the young people who presented themselves to the Committee impressed us as putting forward extremely cogent arguments in favour of acknowledging the need for a reduction in the age of majority.
Further arguments have been made against the reduction which the Committee recommended, principally attacking, I suppose, what was the foundation of the Committee's position—that by the age of 18 young people have reached a maturity sufficient to order their affairs. It has been pointed out that, while there is medical agreement that physical maturity is now reached appreciably earlier than formerly, there is no such demonstrable certainty that psychological maturity is reached at an equally early age. It is truism that psychological medicine is in many respects less precise than the other branches of the profession, but we did not receive any evidence whatsoever to suggest that there was not a clear connection between psychological and physical maturity. I put it no higher than that.
It is also cited in support of the view that the age of majority should not be altered that the incidence of juvenile delinquency in the community is increasing, and that this has to be taken as evidence of an increasing immaturity. It is important, however, that the House should bear in mind that we are not here considering the treatment of the abnormally immature juvenile delinquent but the broad majority of people into whose minds it would never enter to commit an offence, to break the law or to behave in an anti-social fashion. It is with this broad majority that we are primarily concerned, and we have to consider whether those people are harmed by the law as it stands. I believe that the evidence submitted to the Committee showed overwhelmingly that considerable hardship is suffered in a number of cases by those who are brought up against the present law.
A further point made in opposition to the argument for change related to the

growing incidence of young marriages, and the general social undesirability of encouraging them. I think it is true that no member of the Latey Committee would have wished to do anything to encourage young marriage, particularly marriage under the age of 18, but it was recognised by the Committee that the requirement of parental consent to marriage could not be shown to affect the issue one way or the other. Indeed, it was argued by a number of witnesses that the present law served to weaken the basis of trust and family relationship upon which it might be urged that parents would be more likely successfully to exercise their powers of persuasion.
I promised not to rehearse at length the arguments that were put forward by the Committee—I believe that they have been put better than I could do it, and at greater length than would now be appropriate—but I believe that if the Government speedily implement these recommendations they will have served our young people well. I appreciate greatly the opportunity which serving on the Committee gave me to confront these questions and to expand my own personal understanding of the problem.

6.15 p.m.

Mr. Percy Grieve: First, I associate myself with the hon. Member for Caithness and Sutherland (Mr. Maclennan) in congratulating the hon. Lady the Member for Hamilton (Mrs. Ewing) on a witty and informative maiden speech. We watched her campaign with admiration, and all of us on this side regard her victory as second only to another possibility which she quite completely ruled out. We are happy to see her here. We have heard the quality of her speech, and we look forward to many contributions from her in the future.
Perhaps I may say how completely I agreed when the hon. Lady spoke up for that part of the Report which recommended that in this country we should substitute the word "minor" for the word "infant". I began life as a minor and a pupil with a tutor and curator—heaven knows what might have happened had I began life as an infant. It is much better to begin life as a minor.
I must also tell the hon. Lady that we shall watch her progress here with great sympathy though, as an expatriate


Scot with the honour of representing an English constituency, I am not sure that I am wholly in sympathy with her aims, because goodness knows what would happen to many of us serving in England if frontier posts were to go up along the Scottish border.
Being in a congratulatory mood, I now follow those who have congratulated the Latey Committee—and we are happy to have with us the hon. Member for Caithness and Sutherland who was a member of that Committee—on a racy, interesting and highly readable Report. It was a Report—and this is not true of all Blue Books—that one could use as bedside reading on returning home after an all-night sitting.
I read the Report with a mind very open to being convinced that it would be right to reduce the age of majority from 21 to 20, 19 or 18 if cogent reasons for that step could be found. After carefully reading the Report, and having had the advantage of hearing views at a large meeting of young people in my constituency, I came to the conclusion that the balance of the argument was with the minority Report.
In considering proposed changes or reforms it is always good to consider, first of all, the historical background—and that the Latey Committee did very fully—and, secondly, the practice in other countries. Here the Committee was perhaps too prone to take an insular line and to reject the experience and practice of other countries. Indeed in the minority Report one found a headline which spoke of
Lesser Breeds without the Latey Committee?
When considering an important reform like this, I submit that that is not the way in which to approach the practice of other countries.
As to the historical background, we have heard a great deal about changes in maturity, and the Latey Committee referred to this. It is said, and there is some evidence for it, that young people are maturing earlier and therefore there is some reason for reducing the age of majority. But the present age of majority has subsisted for many years—as the Committee showed, for many centuries. In the Middle Ages, in the 15th and 16th centuries, 21 was the age of majority but

I do not think there is much doubt that people matured much younger. They married much younger and went about their affairs and business when they were much younger.
The fact that 21 has been regarded as the proper age for many years shows that this age should not be overthrown and another substituted without very cogent reasons indeed. So much for the historical case. What about experience in other countries? As my right hon. and learned Friend the Member for Warwick and Leamington (Sir J. Hobson) pointed out, there are very few countries where 21 is not the prevailing age of majority. Those countries where a different age prevails—Japan, 20; Russia, 17 or 18; Alaska, 19; and Hawaii, 20—are not perhaps those which immediately suggest themselves to the British Parliament as most socially comparable to our own.
What do other bodies suggest as the proper age for majority in other contexts? My right hon. and learned Friend referred to the Wolfenden Committee, which recommended 21 as being the relevant age of consent. He also referred to the White Paper on The Child, The Family and The Young Offender. I was a little surprised to hear the right hon. Member for Fulham (Mr. M. Stewart) commit himself to saying that on the whole the Government are in favour of the majority recommendations in the Latey Committee's Report. That same Government were responsible for the White Paper, Cmnd. 2742, in 1965.
It is true that on the whole we have heard comparatively little about it since, but that White Paper recommended that offenders under the age of 21 should for the great majority of purposes be taken outside the purview of the ordinary courts. It said, in paragraph 30 in regard to hearings and appeals:
The young offenders' court would sit at separate times from both the adult courts and the family courts to avoid contact between adults accused of crime and the persons of differing ages with which the special courts would have to deal. Appeals from a young offenders court would be heard by a court of quarter sessions specially constituted…
The whole object of that White Paper was to treat offenders under the age of 21 as not being adults, as being individuals who should be taken outside the purview of the ordinary courts and subjected to


a completely different régime for trial in the young offenders' court unless that court for some special reason or purpose thought it right to send them for trial at assizes or if they elected for trial by jury.
This shows a complete dichotomy in the attitude of the Government to the problem of youth in the sense of what is the right age for a person to be treated as an adult. If the White Paper is right in its conclusions and recommendations, one would expect the Government to say that the Latey Committee must be wrong. The point I make is not one of how much juvenile delinquency there is. That has nothing to do with it. If a person is only to be treated as an adult for the purposes of responsibility toward society, so far as crime is concerned, at 21 and under that age is to be taken outside the scope of the ordinary courts where he appears at present, would it be right to reduce the age of majority?
In effect, what the country would be doing if it implemented that White Paper and implemented the conclusions of the majority of the Latey Committee would be to give young persons much greater rights and to subtract enormously from Their responsibilities. That would be wrong. In considering the Latey recommendations the Government would be right to give very serious consideration to that.
I turn from that aspect of the case to the question of demand. The hon. Member for Caithness and Sutherland, a member of the Latey Committee, spoke of demand and in an earlier paragraph of the Report there is a reference to demand. I cannot lay my hands on the paragraph at the moment, but there was a statement in the early part of the Report that the views expressed by young people to the Committee indicated that the majority were in favour of the change. That was certainly not the impression made on the minority of the Committee who were in favour of retaining 21 as substantively the age of majority. They pointed out the results of the opinion polls which, a few moments ago, the hon. Member for Caithness and Sutherland wished to discount.
I had a meeting in my constituency to elicit the views of young people. At a

meeting attended by 60 or 70 of them I did my very best not to express a concluded view because at that stage I wanted to find what their views were. They were young people between the ages of 16 and 25. I asked those who had a clear view on the matter to tell me their view. The majority were in favour of retaining 21 as the age. If that is a good example of opinion in the country—and there is much in the Latey Committee's Report to suggest that it is—would it be right to thrust majority on a group of the population who are not asking for it?
If there is no great demand it is unlikely that there is any great ill to be remedied by this reform. In paragraph 523 the minority said:
The first notable thing is the limited nature of the demand for any change in the existing law. Until it was raised in correspondence to The Times (in September, 1963) the subject had hardly been raised in public debate. And even thereafter it was very little mentioned, except in the context of the age-old argument Old enough to fight, old enough to vote'".
In paragraph 524 the results of various opinion polls were referred to. I quote only one for this purpose: marrying without parental consent, 62 per cent. of those aged 16 to 20, and 65 per cent. of those aged 21 to 24 were in favour of keeping the relevant age of majority at 21.
If 21 remains, as, after this consideration and reading the whole Report, I believe that it should, as the age of majority, should there be any other change or should there be a modification in it as the age of majority? I was interested to see that the minority of the Latey Committee considered the question of allowing persons to assume majority on marriage. For marriage, it would still, of course, be necessary to have the consent of the parents or a court up to the age of 21.
It is noteworthy that in France—this is set out in Appendix 7 to the Report—the normal age of majority is 21 but a person attains his majority either on marrying or upon attaining the age of 21. The minority Report stated, in paragraph 593:
Left to ourselves we should probably not have been persuaded in favour of any reduction in the age of majority in the fields of contract or property. Indeed, the more we


think about it the more we should be disposed to agree with anyone who could work out a reasonable formula for enlarging the contractual capacity only of those who have married under 21. But every proposal that has been made to this effect involves the risk of encouraging people to marry merely for the sake of enlarging their contractual capacity—which would not be desirable.
I believe that that is not really a valid objection, however. Once a person has married he or she should have all the rights of majority—the right to make a will, the right to contract and other rights dealt with by the Latey Committee, such as the right to own land—indeed, every right incident to complete majority.
I cannot think that anyone is going to contract a marriage merely for the sake of being able to enter into a contract for the purchase of a washing machine or something of that kind. Most of these things are wanted only by those who are married, anyway. Therefore, whilst I accept the conclusions of the minority of the Committee, I suggest that there is a strong case for giving majority on marriage. This has been done in France since the Code Napoleon was promulgated. With that reservation, I believe that we should maintain the majority age at 21.
I am completely with the minority of the Committee in thinking that a person should not marry, however, without permission under the age of 21, that the consent of the parents or the court should be obtained first. I agree with my right hon. and learned Friend on this. This is not a knuckle-duster but something in the background which would reinforce parental rights. As the minority pointed out, it is noteworthy that the breakdown rate of marriages contracted by young people is three times greater than the breakdown rate of marriages among persons who have achieved their majority. That does not mean that every person contracting a young marriage has a breakdown in that marriage—far from it —but it shows the necessity for care in young marriages.

Mr. Maclennan: In the earlier part of his speech, the hon. and learned Gentleman drew attention to foreign law and felt that it should have greater attention paid to it. Would he care to pay the same attention to the law of Scotland in the matter he is discussing?

Mr. Grieve: Obviously I have considered that but what I am adducing now are figures which show the tendency to break down in marriages contracted by the young. It is not a question of law but of fact. But from that I draw the conclusion that young people under 21 still need fairly careful guidance if, in the view of their parents, they are selecting the wrong partner.
Like my right hon. and learned Friend, I am a father. My children are rather younger than his, but one of them is a teenage daughter. I do not know whether she would take this view but I should be happy to have some voice in her choice at least until she is 21 and, indeed, after. I think that this is the attitude of many parents with the interests of their children at heart.
In saying this I recognise fully, as did the First Secretary of State, that there are unwise or silly parents or parents who bring the wrong considerations into balance. Nevertheless, in my view—and here one draws on experience on many other countries and on a long historical experience here—the right age at which this great freedom should be achieved remains, in so far as it is possible to make statements about this, 21 rather than 18. The case has not been made out for change. In this matter, the burden of proving the case for change lies on those who urge it and I think that the hon. Member for Caithness and Sutherland himself accepted that burden a little while ago.
If freedom to marry untrammelled by the views of parents or courts remains at 21, then the wardship age, of course, should also remain with it, although surely everyone would agree that the age of wardship should go down if the marriage age without consent were to go down. The two are indissolubly linked. I think that there may be a case for wardship even after the age of marriage but it would be quite unworkable.
Anyone practising in the law recognises the drawbacks and disadvantages of the present state of affairs in matters of contract—for instance, the difficulties encountered in practice with the Infants Relief Act, 1874. I was impressed by the minority recommendation that the way to deal with this should be that a person under 21 should be free to contract but


that the courts should have the general power to set aside a contract regarded as neither just nor equitable. That would probably be the sensible way to deal with this.
There is a great deal one could review in the Report but I have concentrated on what, I hope and believe, is the salient question of what should be the age of majority—21, or 18 or some other age. I conclude by saying how stimulating as matters of debate and consideration I have found this Report to be, and in those congratulatory words I include the hon. Member for Caithness and Sutherland.

6.40 p.m.

Mr. W. O. J. Robinson: The right hon. and learned Member for Warwick and Leamington (Sir J. Hobson) said at the beginning of his speech that we were discussing this Report on the same day as we were discussing matters of considerable financial importance. I was not quite sure whether he thought that it was inappropriate that we should discuss this matter today, but I find it very right and proper that we should, on such a day, discuss the impact of the age of majority. We must face the fact that the problems besetting the country now will have to be met and solved by the young people of today. I have confidence that they will be met and solved. It is a good thing that the House can find time today to discuss this problem of young people.
I join in the congratulations which have been accorded generally to Mr. Justice Latey and his Committee for their excellent Report. It is the most readable Blue Book that I have ever opened. I never imagined that I would really enjoy reading a Blue Book. It is not only readable, it is most entertaining on occasions, and could well constitute bedside reading for Members of Parliament and many other people.
It is not merely an exercise in light reading—far from it. The Committee is to be congratulated on the excellence of the research into these problems, and also the very clear and concise way in which its conclusions and research work has been set out. As one who is ageing, I would like to express my congratulations and thanks to the Latey Committee for the way in which it has so readily and formidably jumped to the defence of

young people. Today's young people are the most maligned section of the community. We are all very much inclined, as the Report emphasises, to judge the standards and calibre of the young people by the odd—and I mean odd—exceptions in the community. We are too inclined to take our views of young people from those who draw our attention to their eccentricities.
I want to emphasise the remarks made by the Latey Committee, which stress how easy it is for those who are not closely in touch with the youth of the country to get the wrong idea of what they are like. The Committee refers to the word "teenager", which, to many of us in the middle and older age brackets, conjures up a horrible picture. We think, as the Report says, of the thousands of pop fans screaming out their adoration and admiration for the pop singer. We are also inclined to equate teenagers with people roaming the streets, being rude to adults. As the Report says:
…scores of thousands lead normal, decent lives and little is written about it …".
How true that is.
The Report refers to the old tag about "dog bites man is not news but man bites dog is". That is the situation with regard to young people. It said:
We would certainly like to see more written about the enterprising, responsible and vigorous young people about whom we have had so much evidence.
We would all echo that.

Mr. Grieve: I endorse every single word that the hon. Member has said. This has been true, I hope, in this country not only in this century but for centuries has it not? It is a big jump to make this change on that ground.

Mr. Robinson: I accept that there has always been criticism of the young by those not so young. But probably the mass media for propaganda in these days makes the disparity even greater. We are now able to see on television, and hear on radio, criticisms of young people. These media were not available in the past.
The Committee uses a delightful expression when it denies criticism that our young people are nothing but a lot of layabouts with no visible means of support except the wall of the nearest coffee bar. That is a delightful way of putting


it. As a rider to that I would like to add that the vast majority of young people today have more than sufficient backbone to stand up on their own and do not need the visible aid of a coffee bar wall.
Two aspects of the Report have naturally received the greatest attention. The first is the question of the age of consent to marriage. We are in great danger here of not realising what we are discussing. We are in danger of considering that we are discussing the age at which marriage might safely take place. I adopt a comment made by the Committtee on this when it says:
But at whatever age you embark on it, marriage is a shatteringly serious step….
We would all say "Hear, hear" to that one. We are not discussing that.
If we were discussing the age at which one could safely enter into matrimony, perhaps many of us would not be so wholeheartedly in support of the recommendation that it should be 18—we might even be tempted to reverse the figures. It is a question of at what age are our young people able to determine the partnership which they are about to embark upon for the rest of their lives?
Marriage is a very important step and matrimony a very sacred institution. One should not encourage people to embark upon that journey without serious thought. Can it really be said, when we realise the activities and the responsibilities which young people undertake today, that 21 must be reached before people are able to think correctly and decide their future? After all, so many people have to take a decision about their future, about their careers and many other aspects of life at 18 and below. No one would suggest that they are incapable of doing that.
I was impressed by the statement on the effect of having to apply for consent. The argument presumably is that, under present law, parents are better able to decide what is good for their children between the ages of 18 and 21. This overlooks the fact that in many cases at 18 young people are entirely removed from their family circle. They are at universities or away in jobs and are not under the control or influence of their parents.
They meet a young girl to whom they are attracted, whom they regard as a desirable partner. They then have to go back to their parents and, first of all, introduce the partner whom they contemplate marrying. No two people see another person in the same light and, obviously, parents cannot be expected to see through the same rose-coloured spectacles the young lady or young man whom their child wants to marry. The young person of 18 is removed from the family circle and the parents are certainly not able to determine whether the proposed partner is likely to be suitable.
It is a very poor start in life if young people have to go to the court and ask for a third party to determine whether they or their parents are right. That is the wrong basis for a successful marriage. The Report refers to the fact that the need for obtaining consent by magistrates may even be used as a blackmailing lever by young persons. It is said that if they felt that consent was likely to be refused they would start a family prematurely. I suppose that that is not a very serious suggestion, but it is one of the possibilities. The job of a magistrate who has the privilege and responsibility of determining whether the parents are right in their decision is not a pleasant one and is a task which ought not to be expected of them.
We are in danger of concentrating too much on the paragraphs in the Report about the consent to marriage. The Committee makes some very useful recommendations in the same sphere on the obtaining of consent. I hope that the Government will make it possible to implement the recommendations.
The first is that:
…all applications to the Court for consent to marry should be heard in private.
That is absolutely imperative, because the acrimony which might well develop between parents would be even greater if the neighbours could sit in and hear what was being said.
The Report also indicates that the magistrates dealing with these cases should have special experience and knowledge of young people, which is also very desirable. It also make the obvious point that applications for consent should not be heard in the atmosphere of a criminal court, with the parties going into


the witness box or even the dock to plead their case for a life partnership. I hope that those recommendations will be implemented, if necessary in advance of others in the Report.
A very interesting passage, well worth reading and re-reading for its indication of the Committee's practical approach to the problem, is that about education for marriage. I have already quoted the statement emphasising what a serious step the decision to marry is at any age. The Committee also emphasised the importance of children having education for marriage at the earliest opportunity and the tremendous advantage in human relationships which could follow if teaching on the subject were given in the schools. A number of people probably differ on this and feel that the right people to tell children about the pitfalls or otherwise of marriage should be the parents. I do not subscribe to that view, because very often the more intimate and personal relationship between parents and children makes it impossible to have a detached discussion on the subject, which is essential.
The Report refers not only to teaching in schools but also to the very valuable work of the National Marriage Guidance Council and other similar bodies in preparing people for marriage. It makes the recommendation, while I hope that the Government will adopt, even though this may not be a propitious time for saying so, that the present grants to these bodies are:
… much too small and should be greatly increased.
I say "Hear, hear" to that and hope that it will be possible, because it is essential that young children should have more and more education on these difficult problems.
We must realise that marriage is as important a business enterprise as any other. I was delighted at the statement in the Report that children should grow up educated not only in:
… chemistry or the use of power drills, but in life, liberty and the pursuit of married happiness.
Long may we have Blue Books and White Papers which are written in such terms!
Another important aspect of the Report is the question of the age at which people might enter into contracts. I agree wholeheartedly with the view expressed

in the Report. If we are to accept that people can enter into matrimony of their own free choice at 18 it must follow that they should be able to enter into other contracts. For that reason the Report's recommendations should be implemented.
I shall cite one instance which highlights the ridiculous situation over contracts, the ability to hold property and the age of majority. In my professional capacity, I was approached some time ago about the conveyance of a house being taken in the name of a young bride-to-be. Since this was so unusual, being a reversal of the normal procedure, and was not even a joint purchase, I inquired the reason. I was told that the husband-to-be was a month under the age of majority. His bride who was just 21, could take the conveyance in her name and the husband would have to wait a month until he could be joined in it. That shows that it is imperative that if we reduce the age of consent to marriage, we must also reduce the age at which one can freely contract in other matters.

6.55 p.m.

Mr. James Davidson: The debate is possibly being conducted in a slightly unrealistic atmosphere following the weekend of devaluation and preceding two days' debate on that subject. But I hope that this will in no way detract from the importance and interest of today's debate.
I should like to add my congratulations to the Latey Committee. We all agree that its Report is most readable. It is of the most readable of the Blue Books or White Papers I have yet had the pleasure of looking at. I particularly congratulate the hon. Member for Caithness and Sutherland (Mr. Maclennan), who was able to use his special knowledge of the law of the United States in parts of the Report, and no doubt contributed throughout the Committee's discussions.
My qualifications for talking on the subject are very slight. They are no more than those of anybody who has left the age of majority a long way behind and who has two or three children—in my case three—who have not yet reached that age. In Scottish terms, they are still pupils. I have a son of 12 who, being under 14, is not yet a minor, and I have a daughter of 10 who also has two years to go to reach the age of minority under


Scottish law. I am very concerned about the laws that will affect them when they reach 16, 17, 18 and upwards, as all parents of young children must be.
I agree thoroughly with the Report's general conclusion that the age of majority should be reduced from 21 to 18. It seems that all the medical and other evidence points to young people reaching maturity earlier. The Minister's reference to a certain lack of demand among young people for such a reduction in the age of majority should not be taken too seriously. It would be a poor Government that always waited until there was universal demand before they started to think of changing the law or altering conditions for contract or any other form of legal activity.
I believe very strongly that if a young person is given responsibility he or she will normally take it, but that withholding it is an invitation to irresponsibility. The young man or woman who is not trusted and not given responsibility is likely to remain irresponsible for a long period. We all know that there are irresponsible people of every age. I certainly do not think that between 18 and 21 there is a sudden shooting up of psychological maturity. Most people reach responsibility by the age of 18, and those who do not are not particularly likely to do so suddenly after reaching 21.
I was very interested in the remarks by the hon. Member for Walthamstow, East (Mr. W. O. J. Robinson) about parental consent to marriage below the age of 21. He had a very good point when he said that parents are far too often too emotionally involved in the lives of their children to offer really objective advice to a child who wishes to get married and who they do not think should get married, or of whose prospective partner they do not approve. In that condition, the parent is often the worst person to give advice. A friend of the family who can look at the matter in a detached way, a mature person with legal knowledge, or a school master who knows the child might be far better qualified to advise a child, young man or woman, or a minor of that age wishing to consider matrimony.
I shall try to leave the legal niceties of the Report to the lawyers and advo-

cates, who can understand and argue them. I want to deal with the question of young servicemen and the effect that the Report could have on them when its recommendations are eventually implemented.
This business of the age of 21 is a two-way traffic. It is not just a matter of bringing down the age from 21 to 18 in certain respects. It is also a matter of looking after the interests of people below certain ages, and in this respect we all know that young men of 14 or 15 can commit themselves to a career from which at a later stage they have considerable difficulty in extricating themselves. May I quote from an article which appeared in the Observer on 5th March, 1967. I will not quote it all, because it is too long. It reads:
The National Council for Civil Liberties has received over 50 letters on this subject".
By now it must have received many more.
One seaman writes: "I'm beginning to think that it's a crime to want to be with my wife and to see my child grow up.' The mother of a soldier who has seven years to serve says, 'It must be like serving a prison sentence. How many people know what they really want at 17?' Another mother comments: ' Surely it costs just as much to train a doctor or scientist at university, and these people aren't tied down at all'. An R.A.F. pilot who 'signed his life away' writes, It is truly iniquitous that a youngster is allowed to commit himself for such a long time to a life about which he knows very little'. A sailor who deserted ten years ago tells the National Council for Civil Liberties: 'At this impressionable age (15) I was only concerned with getting away from home and the whole romantic image of going to sea '.
Boy entrants to all Services give an undertaking that they will serve 12 years after they complete their apprentice training. They are allowed to buy themselves out for £20 in the first three months of boy service, The Army allows boys to apply to buy a discharge (this costs between £50 and £150) before the end of their apprenticeship, normally at 18. But the other two Services will allow a discharge at this age only on compassionate grounds. Boy recruits in the Army now number 10,000. Last year it recruited 5,836 boys: in the same year 1,450 applications for discharge were granted, half of them by purchase. The Navy's recruitment of under-I8s in 1966 was 4,566 and the R.A.F.'s 1,244.
This is a very big problem, not just affecting a few people. The artcle added:
In almost every case, the boy concerned or the parents have assumed that discharge by purchase is an Automatic right. Recruiting officers should be fully satisfied that the 'contract' is fully understood by the prospective recruit.


I know that personal cases make bad arguing points, but I hope that the House will forgive me if I quote my own case. Because it is my own case I feel very strongly about it. In 1940 at the age of 13 I decided to go to sea. The quickest way of doing so was to sit the entrance examination for the Royal Naval College, which I did. I entered as a cadet. I signed nothing and, as far as I know, my parents signed nothing. Looking back to those days—although I enjoyed much of my time in the Navy—I try to find what were my motives at the age of 13 in wanting to go to sea. Apart from the general desire to travel, there was the fact that my father was already at sea on East Coast convoys. I had recently seen a film about the sea which greatly excited my imagination, and I was also most attracted by the Service gas mask and tin helmet, which were carried by young cadets. Instead of having one of the civilian masks, which looked like a lady's handbag, the cadets had the Service gas mask and tin helmet, and at the age of 13 I found them extremely attractive. The glamour of the uniform the attraction of the Service and the fact that my father was at sea were all my motives in making that decision at the age of 13.
I was one of those who was old enough in 1945 "to fight but not to vote", as it has been put. I remember resenting that very much at the time. I had a fairly responsible job in the last ship on which I was serving. I was a surface teller in the operations room, passing filtered reports to the bridge and the captain. And yet I was too young to vote.
Two years passed. I applied for university and was accepted, but I was told by the powers-that-be that in my category I could not be released. I had to remain in the Navy for a considerable number of years. I am not suggesting that the time was entirely wasted, but I suggest that a boy or girl could change their minds many times in the course of the teenage period from 13 to 18 or 21 or beyond.
I believe that the solution, or part of the solution, is contained in page 113 of the Report. It recommends that within six months of the date of entry a youngster should be given the opportunity to opt out and that within three months of the age of 18 this opportunity should be repeated. It also recommends that

parental consent to enlistment should be obtained under the age of 18. All these three points are extremely important, and I would even add a fourth. When that young man or woman has reached the age of 21, they should be given a further opportunity to opt out if they so wish.
I fully realise the difficulties and the possible extra expense which this may cause the Services, but that must be accepted. Anything less than acceptance of these three points does an injustice to a large number of young people. If young people enter the Services knowing that they have these safeguards it will make them better Service men in every sense, happier and more contented, and they will be able to give better service because they know that if any factors alter in their domestic life, and they wish to get out of the Service for any reason, they will have the opportunity to do so not just once but again at the age of 21. The Minister referred to the difficulties which this would cause the Services, but that is an aspect that will have to be overcome.
I should like to draw attention to the action of the Minister of Defence for Administration in postponing the long-awaited Ministry Report on the recruitment conditions for young and reluctant Service men. In May he promised an all-party deputation of M.P.s that he would tell the House the outcome of his examination of this problem six to eight weeks after the Report of the Latey Committee. Before Parliament resumed for the new Session, he informed my hon. Friend the Member for Orpington (Mr. Lubbock) that his promise could not be honoured. He gave the somewhat lame justification that he thought that the Latey Committee would report in November. In fact, it reported in July. In a letter to my hon. Friend dated 5th October he said,
I had it in mind that if the report of the Committee came out before the Summer Recess I would make a statement soon after Parliament resumed.
There may be very good reasons why he has been unable to make that report to the House, but he should delay as little as possible now, because it is awaited with great interest not only by many hon. Members but by many young Service men who are personally affected by it.
May I refer briefly to the extent to which the Report may affect the Scots


law. The hon. Member for Hamilton (Mrs. Ewing), who made such an excellent maiden speech, covered many of the important points about Scots law. May I quote from page 24 of the Report, in which it says,
Several witnesses have stressed that the laws of England and Scotland in this field should be brought into line. The point is not within our terms of reference. Some would say that in this very personal field of the law there may be good and continuing reasons for differences. But it may be of some significance that in Scotland where young people have much more legal capacity at a much younger age there is no evidence, so far as we are aware that there is any public trend for a change towards further protection.
This may well be true. The general recommendations of this Report are for a reduction of the age of majority from 21 to 18. With this I entirely agree, but I would not like this to mean in due course, when a Scots Bill follows an English Bill, an additional restriction on minors in the age group 16 to 18 in Scotland. At the same time I should like to leave the House with the thought that perhaps in one respect Scots law goes a little too far, and that it might, perhaps, be wise to raise the minimum legal age of free marriage in Scotland from 16 to 18.

7.10 p.m.

Mr. Leslie Huckfield: I should like to begin by congratulating the hon. Lady the Member for Hamilton (Mrs. Ewing) on having the courage to take the plunge so quickly following her entry into this House. I well remember that when I came to this House in March I waited timidly for a month before taking the plunge, as I did, quietly, one Friday morning. To all that can be said of the eloquence of the hon. Lady's speech one can add that we appreciate the colour she adds to this House.
I am rather concerned at the remarks which have been made by hon. Members opposite about the generation of which I still call myself a member, because before coming to this House I had, I think I can say, a fair amount of experience of young people, not only in political movements but also in student life and other aspects of life. It appears above all to me that some hon. Members opposite who have been speaking

this evening seem to have lost touch completely with the way in which young people today are thinking and feeling and going about their lives, and that that ought to be causing the House concern.
I am particularly concerned about the voting laws. I fully appreciate that the Latey Committee was not supposed to consider that, but the voting law peculiarities are still such that, because of the timing of elections and the timing of the drawing up of the electoral register, it may not be possible for people to vote till they are about 25 or 26. It is still not possible, often, for young people to vote till they are 22.
It is not only the voting peculiarities with which I am concerned this evening, but some of the other peculiarities with which the Latey Committee, whom I congratulate upon producing such a splendid Report, was supposed to be concerned. It seems to me that we still in this country have a situation in which young people have to bear many of the burdens, have to shoulder many of the obligations, but do not have many of the rights.
Young people at the age of 18 could be hanged. They cannot now. Young people have to pay adult National Insurance contributions at the age of 18. They have to go along, many of them, unfortunately, to the labour exchange at the age of 18, and, of course, they could be called upon, when we had conscription, to fight for their country. All of these obligations and all of these burdens they could be called upon to carry, but they have never had and they still do not have the right to voice their opinions on some of these matters.
Before coming to this House I had—indeed, I still have today—a fair amount of experience of the Young Socialist Movement. This was one of the things which first interested me in politics. It has given me the opportunity of firmly establishing the fact that many of the younger generation—call them what you will—people of 17, 18, 19, 20, who have not yet attained the age of majority—are certainly more adult in their outlook, and certainly more principled in their outlook than many people who have attained the age of majority. For instance, in my constituency, only this summer, a group of young people, who


called themselves International Youth Enterprise, organised by themselves the sponsoring of a 20-mile road walk. Again nearly all by themselves, they went over to Greece to help to build a community centre for young people out there. If people of 16, 17, 18 in my constituency can so organise themselves and do this sort of thing I think they ought to have many of the rights which people who are two or three years older have. They do not have them as yet.
We hear a good deal today about the more colourful facets of my generation—and I will call it my generation. We hear about "flower power", we hear about the Beatles—and I am proud to say I am a Beatles fan, though I shall not detain the House by going through the hit parade at this juncture. But I think I can say that the kinds of things young people are thinking today, the kinds of things which make them more colourful, may conceal some of the deep responsibility which our young people are capable of bearing.
This is very often concealed by apathy. At least, it is called apathy. Much of this apathy springs directly from the fact that these same young people are still not permitted to bear responsibilities. The reason why they feel apathetic is that they feel cut off from the responsibilities which people who are two or three years older carry. I firmly believe that if we give these young people responsibilities, the apathy will give way to the fully fledged responsibility of which I know many of them are capable.
This generation is also a generation which is full of idealism. It is the kind of idealism which I should like to see seeping into our national life rather more. It is the kind of idealism which I should like to see seeping rather more into this House. It is the kind of idealism which I should like to see tempered with rather more responsibility. This is another reason why I am firmly in favour of bringing the age of majority down to 18.
Another reason why I firmly support this Report is that in this country since the war we have had a development of a specific teenage market. It started about 10 or 15 years ago, with the production of pop records directly aimed at young people; and then we had the more expensive long-playing records and the more

expensive clothes. Here is this market which is specifically aimed at young people. Yet young people do not have the right to decide many of the things which have led to this market being inflicted upon them. I say that if they are sufficiently fully fledged to have a specific section of commerce aimed directly at them then they are sufficiently fully fledged to participate more directly in the organising of the commerce, and that is why I think, more specifically, that the age at which contracts can be made legally binding should be brought down to the age of 18.
Various hon. Members referred to marriage, and consent to marriage below the present age of majority. In many of the country districts—I know, because I was brought up in one—the age of 21 still has a mythical significance. Many parents feel that they have the right to have a tremendous hold over their children and to have a tremendous influence over them till they are 21. This in many country districts causes a great deal of friction, because children at the age of 17 or 18 are fully prepared and quite responsible enough to bear some of the obligations and to carry some of the responsibilities which their parents still feel they are entitled to decide for their children before the children are 21. Even if we bring down to 18 the age at which a young person can marry without permission or consent we shall still find that young people will be very loath to go against their parents' advice.
This is not a situation where everyone will rush out and marry at the age of 18. It is not even a situation where the churches and divorce courts will be filled with people at the age of 18 or 19. It will not change the basic responsibility of young people. They will still be responsible and they will still listen to their parents, but, in certain very deserving cases, instead of having to go through rather obnoxious procedures in court, they will be able to give full vent to their feelings, as they are entitled.
There are a great many more practical reasons why I support and congratulate the Latey Committee. I have not lived at home with my parents for long periods since I was 17 years of age, not because I hate my parents or my home but simply because my life has developed in that way. I know many more people


who have gone through the same kind of change. They have left school at 16 and taken up some kind of apprenticeship, or they have gone away to college or to another part of the country to take jobs as nurses or as trainees of some kind. In nearly every case, by the time they are 17, young people of today are living basically different lives of their own, separate from their parents, and they are quite different lives from those that their parents were living when they were 17 or 18. That again leads to a great deal of conflict in some homes, especially where parents continually remind their children of what they themselves were doing when they were 17 or 18.
In a situation where young people are capable of leading their own lives at the age of 17, where they want to get married, set up home and buy furniture, the law today is extremely restricting. People are marrying earlier and leaving home earlier. It is for practical reasons which exist already that we feel that the law should be changed, not because we want to change society but because we want to recognise society as it exists.
It is probably the experience of hon. Members and it is certainly that of many of my friends that the best way for young people to learn is to make their own mistakes. The younger generation has proved itself by the many responsible tasks which it is capable of bearing. It is capable of deciding for itself and of making its own mistakes, but, more important, it is capable of learning by those mistakes. Those are the real reasons why I commend the Report to the House.

7.24 p.m.

Mr. Daniel Awdry: I agree with a great deal of the speech of the hon. Member for Nuneaton (Mr. Leslie Huckfield). I do not know very much about young Socialists, but I agree that very many young people are more mature than a lot of older people realise. Therefore, I agree with him that more responsibility should be given to young people, and I will develop that theme in a moment.
Before coming to the main part of my contribution to the debate, I want to add my congratulations to the hon. Member

for Hamilton (Mrs. Ewing) on her splendid maiden speech. She showed that she has an excellent sense of humour, and that will stand her in good stead in the House. She made a charming speech and we all look forward to hearing her on many occasions in future.
Like other hon. Members who have spoken, I pay tribute to the Latey Committee for producing such an excellent Report. Apart from anything else, it is extremely readable, and there is a delicious lack of pomposity throughout the document. It demonstrates a great understanding and sympathetic treatment of this extremely difficult subject which is, after all, an inquiry about human beings. Clearly, the members of the Committee were well chosen, and they have done a superb piece of work.
Their approach to the task is set out in the words of paragraph 71, which has been quoted by the First Secretary but which is worth quoting again:
… we feel extremely strongly that to keep responsibility from those who are ready and able to take it on is much more likely to make them irresponsible than to help them.
That must be the correct approach to the problem.
At this point, I want to make a general observation which applies to all Committees of this kind. I have faith in the committee system. I believe that committees which study subjects in this sort of depth tend to come to the right conclusions. This Committee met on 65 occasions, it interviewed no fewer than 81 witnesses, and it read nearly a hundred separate written memoranda. By an overwhelming majority of nine to two, it recommended that the age of full legal capacity should no longer be 21. I am certain that it is right.
Many people in the House and outside it will express contrary views, but I doubt if they will have studied the question with anything like the attention which the Committee gave to it. Therefore I hope and believe that the Governmnt intend to make some changes in the law affecting the age of majority.
Clearly, the heart of the matter is the age of "free marriage". The decision which any of us make about marriage is clearly the most important one that we ever have to make. If we are considered mature and old enough to do that on our


own, clearly we are mature and old enough to make all other decisions. If, therefore, we can fix the right age for free marriage, we shall also be able to do it for practically everything else.
The importance of marriage is stressed in paragraph 135, in which the Committee says:
Marriage was the most difficult and the most important of all our subjects. It is the most important, because of its consequences: make the wrong contract and you suffer for a year or two, and perhaps make an adult trader miserable for a few months; make a wrong marriage and you may suffer for life and spoil the lives of your children after you.
The present state of our law on free marriage is not satisfactory. Let us take the sort of case that we may have to consider. I cannot believe that anyone in this House considers that a girl of 20 or 20½ needs her parents' consent to get married today. Just as my right hon. and learned Friend the Member for Warwick and Leamington (Sir J. Hobson) has done, I have to declare an interest. I have three daughters, and the problem could well be mine fairly soon in respect of my eldest daughter. I do not think that I should be able to exercise a veto on any one of my daughters once they reach the age of 19 or 20. If I did not approve of her choice, no doubt I should exercise such persuasion as I have, if any; but persuasion only it must be.
A great deal has been said about the age of maturity, and I rather enjoyed the definition which appears in the minority Report in paragraph 536:
Kenneth Lovell says: 'A typical psychiatric definition of maturity would suggest the ability of a person to work out a harmonious relationship between his basic needs, conscience and ideals on the one hand, and the environment on the other. This will permit him to make the maximum use of his psychic energies in constructive work, adjustment to the opposite sex, and altruistic living. Maturity in this sense demands that the individual be able to make decisions for himself and accept responsibility for his actions and requires some ability to evaluate.' 
That is a fairly tough test of maturity. I can think of many people of 30 or 40 who are clearly totally immature by that definition.
My definition of "maturity" would include an ability to respect another person's point of view and personality. Many young people under 21 today have learned to do this by the hard experience of life.
Having said that, I concede that to lower the age to 18 is to take a chance, if not so much for girls, at any rate for boys. I have thought about this a great deal. We should fix the same age for boys as for girls, and on balance I consider that we should play safe for the time being and make the age 19.
If I was asked to set out my arguments for making the age 19, I would refer back to paragraph 122 of the Report where the case for 19 is very fully argued. The case is so well put there that it is worth spelling out again. The Committee there says:
The advantages of 19 are these:
(a) We are sure that by 19 the vast majority of young people are ready for the full rights and responsibilities of adulthood. At 18 there must inevitably be more who are not ready—though admittedly only a minority.
(b) In recent years there has been a steep rise in the number of marriages at 19, which increase has not been reflected to anything like the same extent in the number of marriages below that age. And it is those who are or who are trying to be married who mainly find themselves hampered by the restrictions of the law as it stands.
(c) If 18 might be the right age with the school leaving age at 15, then 19 would match the school leaving age of 16, which is to come in 1971. This would carry more weight if school life were as divorced from real life as it used to be; but it still remains a reasonable point."
These seem to be excellent arguments for keeping the age at 19. I am surprised that those arguments were rejected by the Committee. I realise the reasons why they were rejected, but I do not think they were convincing reasons; for my part I would fix the age for free marriage at 19.
From my experience as a lawyer, I conclude that any attempt today by parents to stop a child over that age from marrying by refusing consent does great harm. If a child applies to the court—and I have been involved in these cases, and we heard the experience of a magistrate earlier in the debate—the magistrates very nearly always give consent, but there remains a permanent bitterness between the parents and the child. I find these sort of cases extremely depressing and would like to see an end to them.
For contract and also for property I would propose that the age be fixed at 19 and—dare I say—for voting, too. On this particular point I agree with the


minority report which comes out in paragraph 560, subparagraph (c):
The age of majority in private affairs cannot logically be considered in isolation from the age of majority in public and civic affairs.
This seems to me absolutely right. I realise the dilemma I am in, as my right hon. and learned Friend the Member for Warwick and Leamington said, in that I have been quoting from both the majority and the minority Report. On this point I can see no distinction between private and public affairs. If we make the age 19 for private affairs, we must be prepared to see the logic through, and allow it for public affairs as well. If a person is old enough to get married without his parents' consent at 19, old enough to have children and be responsible for them, and old enough to earn and keep unlimited income and capital, surely he is old enough to vote as well. I am not afraid of the political consequences. Not all these young people will be young Liberals. Some will not want to vote at all, but those who do will do so in a serious and responsible way. As has been said repeatedly, because we are fixing the age at 19, it does not mean that young people will necessarily be voting at 19. Many of them will still not be able to vote for the first time until after they have become 21. If we give young people responsibility in the private field, as I think we should, because in my opinion the Report is right, they will resent it if we do not give them any power or representation in the public field as well.
I come back, as the Committee did time and time again, to its conclusions in paragraph 71:
For we feel extremely strongly that to keep responsibility from those who are ready and able to take it on is much more likely to make them irresponsible than to help them.
By giving younger people the vote, we shall be taking a step in the right direction. I hope that we shall do this.

7.35 p.m.

Mr. Denis Coe: I wish to intervene only shortly in this debate. In doing so, may I apologise to the House for being unable to be present earlier on.
Like other speakers, I congratulate the members of the Latey Committee

for bringing a blast of realism into the true position concerning young people today. If for nothing else, their Report is a tremendous contribution to thought about this matter.
We in this House recognise the fact of earlier maturity. As an ex-teacher I want to comment very shortly on one of the general conclusions in paragraph 518 and one other point earlier on. That is where the Committee say:
That the start which has been made in education at school in personal relationships and in the realities of family life should be developed much more fully.
I wholeheartedly underline that point.
Already two quite remarkable things have been happening, particularly in secondary education, over the last decade or so. First, what is tremendously noticeable on going into secondary schools today, is the way in which children have developed a self-assurance which was not perhaps so evident in the days when we were at school. I believe this is because they have been helped through the attitude of the staffs of these schools to think for themselves and to find out as much as they can about issues, questioning them to the full. It is this sort of attitude which is contributing to this early maturity and is something which, as the Report rightly says and stresses, should be encouraged to the utmost extent.
The second remarkable thing which is also happening in our schools is the emphasis which is now being placed on community service. This is a fairly recent development in the way in which it is being carried out today. I hope that my right hon. Friend, the Minister of Education, will do all in his power to help headmasters, and masters and mistresses in the schools who are concerned with this, to encourage it still further, because sometimes the sort of community service which youngsters are in fact taking part in is partly held up because of administrative difficulties. It seems to me that this type of service is of great help in guiding this earlier maturity into the best possible ways of social development and social co-operation.
I would only add on this point that it seem unrealistic to talk about earlier maturity of children and to talk about the great contribution which secondary


schools in particular can play towards guiding this earlier maturity if in fact there is not at the same time an emphasis in our secondary education on the advantages of co-education. I would argue that the development which we have seen in our primary schools to the position where now 98 per cent. of our primary schools are co-educational ought to be carried through into the secondary schools. At the moment we have a rather surprising situation. We put our children, boys and girls together, at the primary stage and again, they are educated together in further educational establishments, but, in between, for a variety of reasons, in quite a large percentage of our secondary schools we segregate them. It seems to me that the whole question of the development of personal relationships which the Latey Report is recommending would be advanced by accepting the fact that co-education is something which really does help in this process. Therefore, I hope that over the coming years more and more of our secondary schools will become co-educational.
I have one observation to make about an earlier paragraph, the one dealing with the civic field. The Committee said in paragraph 25:
We do not accept that the civic and the private field either would or should necessarily go together …
The hon. Member for Chippenham (Mr. Awdry) took issue with that, and I am inclined to agree with him. It seems to me that if we change the law in relation to marriage and other related issues, we are accepting that a youngster of 18 has the maturity and the responsibility already, and if this is the case it seems sensible to extend it to civic responsibilities. From my experience in education I have found that the more responsibility which is given to prefects, and to older members of the school, the more responsibly they act, and if we are going to change the law in one respect, it is sensible to change it also in the civic field. I hope, therefore, looking forward a little, that another body will make a similar recommendation in the civic field.
I wanted to make those points because it seems to me that we ought to see this Report as something which is as much concerned with education as with the bare bones of changing the legal situa-

tion of young people. I, like other hon. Members, welcome the Report as a move towards this.

7.42 p.m.

Mr. Quintin Hogg: The moment that the Leader of the House told us that he was moving the discussion of the Latey Report to Monday, that is today, I knew that the Government were going to devalue the £, and it says something for my personal altruism that I never divulged my knowledge to anyone, nor made use of it myself. I knew that the Government had chosen a subject which they hoped and believed would empty the Chamber for most of the time, and indeed it has done so, except for the happy interlude of a maiden speech which I would congratulate even more warmly if its author were still present amongst us.
We are discussing a jolly and chatty little Report, very well written, and very readable. The members of the Committee obviously had a very good time exchanging epigrams with one another, and ultimately embodying them in their final draft. I am not sure that it is any the worse for that, but I am equally not sure that it is the better for it.
I am glad that my hon. Friend the Member for Chippenham (Mr. Awdry) made the speech that he did, because it so happens that everyone on this side of the House, except my hon. Friend, has sided with the minority rather than with the majority Report. As I am going to express my usual agnosticism on a great number of the subjects covered, I am glad that my hon. Friend made the speech that he did, because the first thing that I want to say is that so far as I know, having studied the views of my hon. Friends, they have not a defined position as a party on this matter, and I daresay that if the party opposite was more fully represented than it has been more views than one would have been expressed on the benches opposite.
One thing about which I feel fairly confident is that the fewer ages of majority that we have the better. I agree with my right hon. and learned Friend the Member for Warwick and Leamington (Sir J. Hobson), and, I think, with the First Secretary, who opened the debate, that although we have not been discussing


the age of voting, and the treatment of young offenders, or jury service, one cannot but think that one decision must inevitably affect the other.
I hope that the Government will not make up their minds on the age of majority until they have the recommendations of Mr. Speaker's Conference before them, and until they know exactly what they are going to do, both about the treatment of young offenders, as a matter of age at least, and as regards jury service, because whether one prefers 21 or 18, or whether one takes the private enterprise view of my hon. Friend the Member for Chippenham, and prefers 19, I cannot help but think that the age ought to be the same for all these activities. Indeed, the reasoning is, if not identical, at least inter-connected and parallel.
The only facts that I know about young people which make them different today from the young people of any other time are that they are, by and large, much better educated than they have ever been before, and this is demonstrable. It is a fact, and not an opinion, and I shall try to distinguish facts from opinions. Secondly—and this is a fact, and not an opinion—they have a great deal more money than ever before.
Both those matters are related to the subject under discussion. I am not as convinced that they necessarily cut one way. I am not, for instance, as convinced as was the hon. Member for Nuneaton (Mr. Leslie Huckfield), that the fact that there is a market of which young people are the subject is necessarily a reason for making them bound by their contracts. On the contrary, the fact that they have more money, earned week by week, is precisely the bait which will attract unscrupulous persons to try to exploit them.
I am not worried about young people being sufficiently responsible or mature. I have no doubt about that. But are they sufficiently experienced? This seems to me to be the nub of the problem, and here I must make a general point about the Report, because it is one which seems not to have been made either by the majority or by the minority.
The underlying assumption of the Report is that the age of majority, of legal liability, ought to coincide with

maturity. Curiously enough, I do not accept this as obvious. At one point it was allowed to peep out of the majority Report's historical conspectus that our ancestors, however foolish they may have been in the 11th century in equating the age of majority with the ability to carry the weight of 11th century armour—which, incidentally, the majority Report greatly exaggerated—deliberately added a year on to what they thought was maturity. Indeed, they deliberately chose to say—and I am bound to say that as an assumption I would have chosen to say—that before we add legal liability to maturity there must be a year or two of experience, and when one is talking about marriage and contractual liability, I would have thought that the assumption that one must identify the age of majority with the age of maturity and responsible thinking is wrong, and that we ought to add at least one year of experience to it.
I would say the same about the problem of marriage. I am far from thinking that parents know better what is good for children than do the children themselves. When I say "children", I mean their children, and not children in the sense of pure age. I know that young marriages tend to have a disproportionately high rate of failure, and I know that on the whole a good parent will tend to discourage young marriage, at any rate in boys. When I say "young marriage", I mean before 21. I know very few responsible parents who would not say, "Do not get married until you have spent a little more time qualifying yourself for life, or getting experience. Look around a bit before you get married."
Although I agree that in the end the parental veto is not a thing which I would probably exercise, the fact that it is there is a matter which gives one authority to speak. The child is apt to say, "What has it got to do with you?" I agree with the minority in that respect and to that extent.
I predict with a considerable degree of assurance that, at any rate marginally, a larger number of young marriages will take place if this decision is made and, if so, a larger number will fail. That means that, marginally, at any rate, a larger number of young people will be made unhappy for life, or at least until they have recovered their equipoise from


the failure of their marriage, which is a very serious thing for any one who has undergone it and even more serious from the point of view of the children of the marriage. Therefore, I remain a little sceptical about the argumentation of the Report.
There are one or two other arguments that I want to put forward in the same direction, pausing in the logic of my argument, now that the hon. Lady is here, to congratulate the hon. Member for Hamilton (Mrs. Ewing) on a most successful maiden speech. Like others who have done so, I want to congratulate the hon. Lady on her sense of humour. Unlike the others, I want to draw attention to her almost sinister command over the rules of order.
When I saw that she had chosen this debate for her maiden speech I thought that she might get into trouble with the Chair. On a Report confined to England and Wales I thought that with her opinions she might even trouble the well-known tolerance of the occupants of the Chair for maiden speakers. Not a bit of it. Each Scottish point was carefully modulated into the English Report in a way which would have done credit to many of the Scottish Members I have heard speaking about other English subjects.
The hon. Lady seemed to have got the idea to the manner born. She realised at once what every Scottish Member ultimately realises, which is that he cannot lose whatever he does. If Scotland is excluded from a Report, great wrong is done, because Scotland is not allowed to be discussed. If it is included it is another example of the majority of non-Scottish constituences impressing their rule upon a recalcitrant Scottish minority.
But it must have rejoiced the hon. Lady's heart to know that almost every Member who has contributed to this English debate has been a Scot. The right hon. Gentleman the First Secretary is probably a by-blow of a Scots royal family. Then there is the hon. Member for Caithness and Sutherland (Mr. Maclennan) and my hon. and learned Friend the Member for Solihull (Mr. Grieve) who declared himself to be a crypto-Scot—and my right hon. Friend the Member for Warwick and Leamington is certainly a crypto-Scot.
I could go on enumerating the speakers, one after another. It is intolerable that they should dominate English Members in this way. But I suppose that nine-tenths of my ancestors came from that unhappy country. We welcome to our midst the first-born child of the hon. Member for Hamilton and we hope to see many more such offspring from time to time.
I now want to revert to the main thread of my remarks. As the First Secretary said, generally speaking we like to base our law on some relevant or practical or even rational consideration. Most of us lawyers have long since given up hope that we can do so but we hope that one day something will be done to make it so.
On this line of country, if the age of majority were 50 or 15 we could see by the light of reason that something would have to be done about it. But here was the flaw in the right hon. Gentleman's approach to the matter. In this question there must be an element of sheer arbitrariness. The same will not do for all people and it will not always do for each subject. If we tailor-make the age for marriage, we shall probably get it wrong for jury service or voting. If we tailor-make the age for borrowing money to indulge in betting and gambling, we will almost certainly be wrong with the age for marriage. There must be an element of sheer arbitrariness when what we are discussing in practice is an age between 21 and 18, choosing any one of the intermediate years that we prefer.
Where there must be an element of arbitrariness in our choice I attach more importance to tradition than I would in other circumstances. Traditions have a habit of being accepted. They have a certain authority. If we cannot achieve total acceptability, a degree of acceptance is not a bad thing to go for. That is why I do not agree with the argument about public opinion. It is not simply that there is relatively little evidence of a demand for this change. If that had been the only way in which the case could be put, I would agree without doubt with the hon. Member for Caithness and Sutherland. But the evidence is that public opinion is against it 2 to 1 amongst the young and rather higher amongst the old.
I am not impressed with the argument that it is only those who come up against the law who complain of it and want to alter it. How about the people who have been able to avoid oppressive contracts? It is all very fine to talk about giving people responsibility and making them free to make contracts, but young people are already free to make contracts. What we are talking about, if people will only use the proper names for things, is the right of an adult to enforce a contract against a minor.
That is what we are talking about, and the young minors are 2 to 1 against being made liable for damages for breach of contract. Everybody in the debate has favoured the majority Report and has said what a fine thing it is to give young people responsibility, and how much they will enjoy being sued in the courts for contracts which they have made.
I remain an agnostic in this matter. I recognise that the young have more money than ever before. But this is what makes them bait for the sharks. I am not impressed with the theory that three years of experience after maturity is too little to enable them to spot a shark when they see one. The hon. Member for Caithness and Sutherland, himself a Member of the Committee and a subscriber to the majority Report, says, "Then we can tighten up the law of contract for everybody." That is all very fine, but I wonder when, and how.
I wonder whether it will really be practicable to exclude all oppressive long-term contracts which impose a liability on a contractor year after year, perhaps for 10 or 15 years of his life I wonder whether a hire-purchase contract with a potential liability of nearly £1,000 is quite such a desirable thing to make a young man or woman liable for in the courts if they sign it, and whether it is not a good thing to say to the man who imposes it upon them, "If the young do not like to keep it, let the old run the risk of not getting their money back"—

Mr. Maclennan: I would make a serious and concrete suggestion. As the right hon. and learned Member is in a particularly fortunate position to affect the law as it appertains to oppressive contracts, perhaps he might regard this as an opportunity for ameliorating the

position as it affects the whole community.

Mr. Hogg: If the hon. Member is referring to the fact that I won the Ballot for Private Members' Bills, he has another think coming. I know too much about the law of contract to start fiddling about with a Private Member's Bill to improve it. I know how far I would get. I would be here till the end of this Parliament and still not complete the Committee stage. Therefore I have other thoughts about that—

Mr. J. T. Price: The right hon. and learned Gentleman is saying that a contract not for the benefit of a minor could be enforced against his best interests. Has he also considered that many cases of imprudent contracts in settlement of Common Law damages cannot be enforced against a minor and that he can force another action under our present system if he has been prevailed upon to accept a settlement for damages which is not in his best interests?

Mr. Hogg: As the hon. Gentleman rightly reminds us, with these cases of serious personal injuries coming before the courts every day, if the majority Report were accepted, the interposition of the judge's consent will be taken away in the case of a contract of settlement entered into by a young person between 18 and 21. I am not persuaded that this is necessarily good, and if both the majority of the Committee and those hon. Members who support them had asked themselves not whether minors—as we must now call them: I agree—should have the right to make contracts but whether they should be sued on them in the courts, they might have reached a slightly different conclusion. At any rate, the reasons for their conclusion would have been a little less obvious and plausible.
Another argument which has been under-rated by those who supported the majority Report is this. The great majority of other countries use 21 as the age of majority. But, says the hon. Member for Caithness and Sutherland and others who commend the majority, "Why not let Britain be a pioneer? Let us not be last in the league table. Let us give a lead for once." That is very fine and large, but what is our philosophy about those things? We ought to have a coherent view.
Despite all the laws of physics, we have just changed our British Standard Time to correspond with that in Berlin, or not far west of Berlin, so as to be the same as the Europeans, despite the facts of longitude and the fact that the United States is hardly a pauper country, although it changes its time according as an aeroplane moves a few degrees east or west.
Then again, we have just moved to early 19th century physics in the form of Centigrade, which seems to attach a disproportionate importance to the boiling point and freezing point of water, so as to be like the Europeans, in spite of the inconvenient size of the degree and the total irrelevance of the two measuring points from which it is made.
But now we have the Latey Committee and we do not want to be like the Europeans but want only to be like the Scots. But I remain agnostic on the subject. If it is right for Centigrade to take the place of Fahrenheit, why should we move from 21 as the age of majority? There is a certain value in uniformity in these things. When I see that not only the Europeans but nearly all the Americans and the Commonwealth adopt 21, I am not sure that the burden of proof does not rest heavily against those who want to alter it.
I do not want to labour these points. I think that, if Queen Victoria had not been Royal and had been allowed to marry without her parent's consent at 18, she would have married Lord Melbourne, and that would have altered the course of events in more ways than one. For instance, we might not have had the Albert Hall. I see a great advantage in having one age of majority, but I remain decently agnostic about the value of change in this respect. The House will be glad to know, I think, that I am a conservative with a small "c" as well as with a large one.

8.06 p.m.

The Solicitor-General (Sir Arthur Irvine): I convey my congratulations to the hon. Lady the Member for Hamilton (Mrs. Ewing), who delivered an excellent maiden speech. As the right hon. and learned Member for St. Marylebone (Mr. Hogg) said, it has been something of a Scottish day. I would say to the hon. Lady that my father was a man of Fife, my mother was a Mackay on her father's

side and a Fraser on her mother's and that one cannot be much more Scotch than that. The hon. Lady will no doubt readily recognise that, even outside the ambit of her political party, many Scots share her passionate devotion for their native land.
Both sides have paid their tributes to the work of the Latey Committee and I should like to add mine. The right hon. and learned Member for St. Marylebone spoke of it—I know that he did not intend this description to be at all compendious—as a "jolly and chatty" Report. It is certainly very readable and is much more than jolly and chatty. Like all hon. Members, the Government are most grateful for the Committee's work.
The right hon. and learned Member for Warwick and Leamington (Sir J. Hobson) thought that the Government had given little indication of their intentions. Another hon. Member said that my right hon. Friend the First Secretary of State had not presented any programme of action by the Government. I must emphasise that this is a "take note" debate. It is the Government's belief that in a matter of this importance and width of scope it is most desirable that the first step after the receipt of the Report from the Committee is to hear and receive the opinions of hon. Members. In a very literal sense what has occurred today is of great importance to the Government because there has been a good deal of variety of nuance and emphasis in the treatment of the various matters arising, and this will be studied with great attention, and the outcome of a study of that kind will be incomparably more worth having than decisions arrived at without considering the opinions of hon. Members.
The right hon. and learned Member for Warwick and Leamington asked me whether I would give some indication of the progress of the Law Commission in its work in this field and whether I would indicate the attitude of the Law Commission towards, among other things, the propects and desirability of family courts. If it were practicable, I should be very happy to give a detailed account of the point which has been reached on these matters by the Law Commission and, if it were possible, an account of the way in which opinions are shaping and taking form inside the Commission. But I cannot


do so. The right hon. and learned Gentleman may rest assured that the Law Commission is hard at work on these matters. The vast task of developing a comprehensive study of the law of contract with a view to its codification has begun and, in the nature of things, it is bound to take a considerable time. I am afraid that the right hon. and learned Gentleman cannot have from me anything in the nature of a detailed or particular reply to his inquiry.
Probably he does not wish to press me for it unduly, because the right hon. and learned Member for St. Marylebone indicated a point of view which has a bearing on this issue—the desirability that there should be some uniformity in treatment and that the recommendations of Mr. Speaker's Conference should as far as possible be synchronised and harmonised with conclusions arrived at about the appropriate age of legal majority. With great respect to the right hon. and learned Member for St. Marylebone, I entirely agree about that. It is a desirable way of proceeding. But it has the quite inescapable result that anything in the nature of too rapid conclusions to these matters and anything in the nature of a too rapid implementation of the conclusions will be detrimental to the objectives which we all have in mind.
My hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan) addressed the House. This was a matter of great satisfaction to us, among other reasons because of his membership of the Latey Committee. He made an observation which has a great deal of importance in it—that as things stand there is no evidence that psychological maturity is occurring earlier than formerly to the same extent that, according to all accounts, physical maturity certainly is. That is a matter which is important for the Government in its consideration of what to do in implementing the Report.
In this connection I would refer to some observations by the right hon. and learned Member for St. Marylebone when he spoke about the circumstance that experience will often add enormously to the capacity of a young person after he has achieved what is called maturity. Certainly that is a most relevant factor to keep in mind. It has an obvious bear-

ing on the determination of the best and most appropriate age at which to make any adjustment which is thought to be called for in regard to contractual liability. What my hon. Friend the Member for Caithness and Sutherland said about the relative development of psychological and physical maturity and what the right hon. and learned Gentleman said about experience as an all-important element affecting growth are considerations to which we must give most careful attention. It is clear that the members of the Latey Committee gave compendious regard to these matters. Nevertheless, our attention has been drawn to them in the debate, and I readily acknowledge their relevance and their importance.
The hon. and learned Member for Solihull (Mr. Grieve) drew attention, as did the right hon. and learned Gentleman, to the fact that by and large very few countries have an age of legal majority below 21, and that those that do are not at first sight notably comparable with this country. There is obvious importance attaching to that. The right hon. and learned Gentleman, in a condition in which rationality was not readily available, thought that perhaps tradition should be called in aid. That may well be so. These matters of the comparable treatment of problems of this sort by different countries are relevant, too. Of course, it may well be that the future will show that in this country we took cognisance of a change in the development of maturity and the age at which it was achieved which marked our understanding of its importance and that, on a certain view of this matter, we advanced thinking ahead of other States. The fact that others have not made the change cannot be regarded by itself as a conclusive reason for avoiding any alteration of the law in this respect in this country.
My hon. Friend the Member for Walthamstow, East (Mr. W. O. J. Robinson) thought that the young people of Britain were the most maligned element in it. He pointed out that, at the age of 18, many young people were already free from the family circle. The close relationship which exists in normal happy circumstances between parents and son or daughter makes, in his view, detached discussion of marriage of rather less value than discussion with others


Would be. That view received some support from the hon. Member for Chippenham (Mr. Awdry). This illustrates again the conflicting arguments which can be brought to bear, with force and persuasion, on this whole matter.
The hon. Member for Aberdeenshire, West (Mr. James Davidson) spoke about the contractual liability age as affecting the position of entrants into the Services. The Minister of Defence for Administration has this matter under the most careful consideration. There are complications and difficulties attached to it, but I can assure the hon. Gentleman that the point is being investigated energetically and carefully.
My hon. Friend the Member for Nuneaton (Mr. Leslie Huckfield) reminded us that at 18 young people assume a whole host of responsibilities and are making their adult National Insurance contributions. He gave examples of the variety of activities in which young people are active—activities of great value and importance in national and international affairs and in which their capacities, abilities and energies play an important part.
My hon. Friend said that many young people were suffering from apathy because they were being cut off in their experience from responsibility. Paragraph 71 of the Report, which is regarded by many people as an important part of the document, states:
… we feel extremely strongly that to keep responsibility from those who are ready and able to take it on is much more likely to make them irresponsible than to help them.
That is a significant passage and it seemed that my hon. Friend was echoing that opinion.
My hon. Friend the Member for Middleton and Prestwich (Mr. Coe) usefully pointed out the importance of this matter in its bearing on teaching, an activity with which he has been connected. As my right hon. Friend said earlier, the Government's position is that we are broadly in sympathy with the recommendations of the majority of the Committee; but on a subject with so many factors and of such wide scope, the need was felt to hear the views of the House. There was never any intention today to present anything in the nature of a programme or timetable. The purpose has been to ascertain from the

debate what views and opinions are held on this important matter.
It seems to me that the aim in our consideration of this subject must be to achieve a balance between protecting the young from exploitation and the need to avoid unfairness or hardship to honest adults. When such a balance must be struck, differences of opinion are bound to reveal themselves. It is important to remember the remarkable degree of unanimity which the Committee was able to achieve. That is striking because this is a subject on which one would expect a good deal of difference of opinion to occur.
It should be remembered that the Committee was unanimous in recommending that people over 18 should be able to acquire a legal estate in land and dispose of their property by will. All the members of the Committee seem to have gone forward on the footing that it is harmful to withhold responsibility from people who are fit and able to bear it.
The majority of nine, including the chairman, recommended a reduction to 18 for all purposes, apart from the criminal law and the matter of the voting age, which has been referred to Mr. Speaker's Conference. For practical purposes, the minority view was confined to the need for people between 18 and 21 to obtain parental or court consent to marriage and to the desirability of continuing the wardship jurisdiction until 21.
On the question of wardship jurisdiction, it is important that the chancery judges should all have been of the opinion that this change, from 21 to 18 as the limit of their jurisdiction, was desirable. The Committee regarded the existing law about the legal effects of contracts entered into by infants as obscure, and the course that it has adopted will be of the greatest interest to lawyers. I say that because the character of its recommendation is, on the major issues of law, that these should be referred to the Law Commission.
This seems to us to be a desirable way of developing the matter. The Law Commission would be fulfilling precisely the kind of function that those of us who always desired its creation pictured it as having; the function of dealing with


vitally important problems of law which the Commission's learning and experience rendered it peculiarly able to consider. That it should deal with this matter of the law affecting the contracts of minors, with the advantage of the recommendations made by the Committee, exemplify well one of the activities that we felt the Commission could most usefully perform.
After all, it has to be remembered that in the Latey Committee there were many distinguished lawyers, and it had a very distinguished judge as its chairman. There were other members who were not lawyers. A situation in which a Committee of that kind, having made this degree of inquiry and investigation, should ask that its proposal should receive the consideration of the Law Commission is the kind of development in our affairs which is not to be assumed will occur, and is, I suggest, a very desirable happening. We therefore welcome that way of approach.
If one thing emerges more clearly than anything else from the consideration of the Report, I think it is that there are not many friends extant of Section 1 of the Infants Relief Act, 1874. The logical consequences of that Section providing that certain contracts are absolutely void have never, I believe, been followed through. The expression "absolutely void" has been treated, has it not, as meaning absolutely void as against the infant? In the absence of fraud, if an infant receives money for goods which he fails to deliver, or receives goods that are not necessaries and fails to pay for them, he is under no obligation to return the money or the goods respectively. In other words, the existing law enables the minor, as it were, to profit from or take advantage of his infancy; that is to say, the law does not merely protect him from liability. It may be thought that the need to reform the law under this head, and to clarify a situation in which the logic of existing provisions is so seldom followed through, should have a certain priority.
I have ventured to put forward these observations, but what is uppermost in my mind is the gratitude I feel to hon. and right hon. Members on both sides for their contributions to this debate, which will have an important bearing

upon the determination as to what is best to do at which the Government will in due course arrive.

Questions put and agreed to.

Resolved,

That this House takes note of the Report of the Committee on the Age of Majority (Command Paper No. 3342).

BRITISH EUROPEAN AIRWAYS CORPORATION (BORROWING POWERS)

8.33 p.m.

The Minister of State, Board of Trade (Mr. J. P. W. Mallalieu): I beg to move,
That the British European Airways Corporation (Borrowing Powers) Order 1967, a draft of which was laid before this House on 31st October, be approved.
Happily, Mr. Deputy Speaker, we have time at a reasonable hour for this debate and, subject to your ruling, I would expect the debate to run fairly wide—

Mr. David Webster: On a point of order, Mr. Deputy Speaker. Is there any limitation to the time for this debate?

Mr. Deputy Speaker (Mr. Sydney Irving): This is exempted business.

Mr. Mallalieu: There was no suggestion that there was any limitation at all. I was merely remarking that we were able to begin our debate at a reasonable time.
It might be for the convenience of the House if, in the main, I were now to confine myself to matters directly relating to the Order and then, if the House will give me permission, I will later try to answer the points that have been raised.
There is, however, one immediate point about which I think the House, and indeed the country generally, would require information. That is the position about air fares following upon devaluation of the £. International air fares are decided by the International Air Transport Association, subject to the approval of Governments. I.A.T.A. has a provision that in the event of devaluation of either the dollar or of sterling, which is the basis for air fares, that for a period of 45 days, or a shorter perior if agreement is reached otherwise, airlines should accept fares on the basis of the


local currency only. Fares paid in London will be paid in sterling and those paid in Paris will be paid in francs, and so forth.
There is also provision for calling an emergency meeting of I.A.T.A. at the earliest possible moment to work out new rates of fares as a result of devaluation. That has been done and an emergency conference of I.A.T.A. will be held in London the day after tomorrow. At the earliest possible moment it will produce a new agreement, subject to the approval of the Governments concerned, for air fares.

Mr. Cranley Onslow: Can the hon. Gentleman give an indication in the light of past precedent of the direction in which our fares are likely to have been thus revised?

Mr. Mallalieu: I think there is very little doubt that sterling fares will rise.
Coming directly to the Order, under Section 22(1) of the Air Corporations Act, 1967, the outstanding aggregate of the British European Airways borrowings, apart from money needed to redeem stock or loans, is limited to £110 million, or such greater sum not exceeding £125 million as the Board of Trade specifies by Order. When these limits were set in 1962 it was expected that B.E.A. would reach the lower limit by the end of 1966. In fact it will not reach that lower limit until some time next month but, because it will reach it then, it is now necessary to extend the powers to the upper limit, which is the purpose of this Order.
These borrowings are for various forms of capital investment—aircraft purchases, for example. The House may remember that in August, 1965 the Government approved B.E.A. purchases of 15 Trident IIs. In December last the Government approved B.E.A. purchases of 18 BAC111, 500 series. The eventual cost of these two purchases for the fleet is likely to be around £75 million spread over 1965–66 to 1969–70. Progress payments have been and are being made. The amount of progress payments on the Tridents so far is £13 million, and on the BAC111s £51½ million. These have helped to bring the borrowings on investment account up to £98½ million. Further progress payments of £13 million will fall due before the end of the financial year on 31st March, 1968.
In addition to aircraft purchases, progress payments have to be made on such other investments as the new cargo terminal at Heathrow, which we hope will be ready in summer, 1969. The Corporation has payments on extensions to the Beacon Reservation System and on computer development and on the installation in the Trident aircraft of the Triplex auto landing equipment. In all, we expect the Corporation's capital expenditure in 1967–68 to be about £32 million. Of this, about £10 million will be met from internal resources, which leave, £22 million to be borrowed from the Exchequer.

Mr. Tim Fortescue: The hon. Gentleman has referred to the new building at Heathrow. Is it not the case that the British Airports Authority is to pay for the building and rent it to B.E.A.?

Mr. Mallalieu: No. B.E.A. is paying for it.
With the Exchequer aggregate of borrowings being £98½ million, with the net progress payments—progress payments which have to be met by borrowing—less the amount which will be met from internal resources, of £22 million and with the £3 million which B.E.A. is allowed to borrow from the bank mainly for working capital, the upper limit we are now proposing in the Order is likely to be reached at or soon after the end of the financial year, 31st March, 1968.

Mr. J. T. Price: I raise no objection to B.E.A. being provided with the funds it requires for capital development and other purposes but I rise, as I have done on previous occasions, to question the wisdom of continually trying to finance these vast operations below the line in the Budget. This is a matter of principle, and I should be out of order if I developed it further, but, for example, I would point out that the Italian air lines, which are a completely nationalised State undertaking—

Mr. Deputy Speaker: Order. The hon. Gentleman is making a speech in place of an intervention.

Mr. Price: With respect, Mr. Deputy Speaker, I was coming to the point.

Mr. Deputy Speaker: I would be glad to allow the hon. Gentleman to proceed if he will come to the point quickly.

Mr. Price: The British Government persists in this policy of financing the nationalised industries below the line in the Budget when some of our greatest competitors abroad are doing it by raising 90 per cent. on the market and 10 per cent. from the Government.

Mr. Deputy Speaker: Order. I would be out of order in allowing the Minister of State to reply to that, as it would be outside the scope of this Order, as the hon. Member for Westhoughton (Mr. J. T. Price) himself indicated.

Mr. Mallalieu: I bow with diffidence, as always, to your Ruling, Mr. Deputy Speaker, but, no doubt, if my hon. Friend the Member for Westhoughton (Mr. J. T. Price) can use his accustomed ingenuity he may be able to develop some aspects of that point later in the debate.
As I was saying, B.E.A. is now up to an aggregate on borrowings of £98½ million and progress payments of a further £13 million fall due before the end of this year. But that is not the end of the story. More borrowing is bound to be required for the existing commitments, to pay for the fleets which have already been sanctioned. Further, beyond that, there is the whole problem of the second part of the re-equipment of B.E.A.
The House ought to know something of the complexity of this problem. It is a jig-saw. It is a matter, as I have personally found, of immense difficulty, and upon which my right hon. Friend hopes to announce a decision in the very near future.

Mr. John Rankin: Will my hon. Friend explain a little more clearly what he means by the second part of B.E.A.'s equipment?

Mr. Mallalieu: I mean in relation to the Tridents and the BAC 111s which have already been sanctioned. I mean the possibilities of providing B.E.A. with an intermediate aircraft, intermediate in size, which has been very much canvassed in the House and the Press recently.

Mr. Rankin: When he refers to the possibility of providing B.E.A. with

another aircraft, which has not been mentioned, has he got the BAC 211 in mind?

Mr. Mallalieu: That, among other things, has been very much in my mind for the past 12 months. Arrangements have to be made to make good the Government's undertaking, given on 2nd August, 1966, that they would take steps to ensure that B.E.A. is able to operate as a fully commercial undertaking with the fleet it requires. This all needs new legislation. It is not possible to prepare that legislation in detail until the vexed question of the second half of B.E.A.'s requirement is decided.
I give notice that, subject to the Parliamentary timetable, and as soon as possible after the announcement of a decision on that subject has been taken, legislation will be laid before the House. However, the future borrowing powers with which that legislation will deal, the future borrowing powers beyond the limit of £125 million with which this Order is concerned, are not especially germane to the present Order. This Order merely extends the limit to the maximum allowed under existing legislation, to permit the continued financing of projects already approved and in train.

Mr. Onslow: On a point of order. The House might be assisted if you could interpret for it the sense in which the Minister's last remark will limit the extent to which we may range in this debate. Is he correct in saying that future borrowing powers of B.E.A. would lie outside the scope of our debate?

Mr. Deputy Speaker: In general terms the Act of 1967 authorised the £110 million under Section 22. The Order covers only the difference between £110 million and £125 million so that anything that is said about future borrowing powers must at least be related to that £15 million.

Mr. J. T. Price: On a further point of order. Before we proceed with the merits of this debate, may I inquire whether it would be in order for me to stand up at an appropriate stage and amplify a little the argument that I put in an earlier intervention? In other words, is it in order to argue, on this Order, whether it is a correct method of


financing and producing the money that the Order requires? Could I call this into question in this debate?

Mr. Deputy Speaker: The answer is "No." That was settled by the original Act.

8.50 p.m.

Mr. F. V. Corfield: It might be helpful if I put on the record at the start of this debate the fact that the Opposition attach as great importance to the contribution that has been made and is being made to our economy by our airlines, whether nationalised or independent, and by the aircraft industry. In that context, the Government can rely on us to give a sympathetic hearing to any measures that appear to us to add to the airlines' prosperity. In considering the Order and any other measures, despite the apparently narrow scope of the debate, it is necessary to bear in mind the ramifications that any change in the financial arrangements of B.E.A., and the purposes for which they are made, may have upon the other nationalised Corporation, the independents, or the British aircraft industry.
The Order provides what in these days may be regarded as a relatively small increase in borrowing powers, particularly in relation to the very heavy commitments which the hon. Gentleman has mentioned and the others in the offing. Nevertheless, the increase from £110 million to £125 million brings the borrowing powers up to the existing statutory limits, and that makes it important that we should know that the Government have plans for early legislation which will not cause further delay or disruption.
I took it from the Minister that the increase was not in itself likely to be enough even to cover the present commitments for the Trident 2 and the BAC 111 leaving out of account, therefore, anything concerning the next generation, whether it be the Trident 3 or B.A.C. 211. The fact that the limit arises from an Act passed only in 1962 and consolidated only this year should impress upon us—if that is necessary—the speed with which circumstances change, particularly in the aviation world.
Before approving the Order we should ask that the Minister should be able to

introduce further legislation in ample time to avoid some of the disruption and perplexities which at present face the Board of B.E.A. The first question is connected with the airline's procurement programme. It would be useful if the Minister would tell us to what extent the present increase in borrowing powers will fail to meet the commitments on the present programme.
Much more important, because it affects the whole financial approach of B.E.A., is that we must press the Minister to expedite the decision between the 211 and Trident 3B. This matter is already having an effect on B.E.A.'s finances and therefore, presumably, upon its needs to borrow. I suppose that the one lesson learned by all of us who have taken an interest in the aviation industry is that delay in decision-making is one of its most costly aspects. It is costly because, whichever way the decision goes, we shall have a situation, even if we are meeting only the needs of B.E.A., in which it will now be necessary to tool up for a faster rate of production than would otherwise have been necessary. My understanding is that that has already considerably increased the estimated development costs of both these aircraft.
There is no doubt that there is a demand for aircraft of that capacity and performance. No doubt the Minister has seen a statement on behalf of Lufthansa and other airlines to this effect. The outstanding lesson is that the chances to Britain's obtaining a share in that market depend very largely on the speed at which we can get into the field, bearing in mind the enormous advantages its big home market gives the American aircraft industry. Over and over again, we have had disappointing results with British aircraft solely because we were too late in the field.
Very often—I am not making a party point— this has been due to a delay on the part of Governments, whether Conservative or Labour, whom we have not yet succeeded in making reasonably good customers. We can, however, claim that the Conservatives were slightly better than the present Government. However that may be, the delay which has already occurred underlines the rather unsatisfactory situation on which the Select Committee on Nationalised Industries has commented concerning the channel of


communication in the case of B.E.A. between the airline and the Government.
We have the situation in which the airline sponsoring Department is the Board of Trade, whereas any aircraft which it may order and which is a British project is within the competence of the Ministry of Technology. We now have a situation in which the President of the Board of Trade has, I understand, assured the chairman of B.E.A.—and the Minister has, in effect, repeated that assurance—that no decision has been made against the aircraft which B.E.A. prefers, namely, the 211, while, at the same time, we constantly read extracts from the Press which indicate that the Ministry of Technology has already taken an entirely contrary view.
I hope that not only the Board of Trade, but the Minister of Technology, will come out firmly and deny those Press reports, otherwise we are bound to be left with the suspicion that a battle is going on between the two Government Departments which one of them has thought fit, improperly, to fight in the Press. This is a very unsatisfactory state of affairs and it highlights the importance, from the national point of view as from that of B.E.A., of an early decision.
I hope that the assurance which we have just been given also indicates that the theory being put around by the Minister of State, Ministry of Technology, that we shall never build another aircraft of our own is not supported by his colleague. Although I believe as strongly as anybody in the advantages of European co-operation in this matter, we do not bring it nearer on terms that are likely to reflect the true potential contribution of the British aircraft industry by announcing in advance that we are to be entirely dependent on that co-operation and on the third parties to the arrangement.

Mr. R. F. H. Dobson: I have with me a copy of the speech, to which the hon. Member has referred, made by the Minister of State, Ministry of Technology, in Cheltenham a few days ago. It contains no such reference as was quite improperly reported in, I believe, the Daily Telegraph the following day. I thought that the hon. Member would like to know this before continuing with his speech.

Mr. Corfield: I am grateful to the hon. Member. If I recollect aright, however, at Question Time two or three days ago the question was put by my hon. Friend the Member for Eastleigh (Mr. David Price) and it was not denied. However, I do not in any way dispute what is in the handout.
Another matter which is important in this connection is that if we are to get the maximum co-operation—this will be extremely important to the cost of any British or European aircraft to B.E.A.—I believe that it is better done by genuine Anglo-French, German or Italian companies taking commercial decisions than by co-operation between two Governments which has so consolidated their industries that they can do it only between Governments, which are apt to produce political rather than commercial aeroplanes. I hope that we will bear this in mind before we charge ahead in making in this country a bigger, larger and, eventually, a single entity with which no foreign firm could form a joint company for this sort of operation.
The other important matter concerning all these aircraft is that the Government should assure us that the initial development cost will not be the only deciding factor. B.E.A. expects as it has every right to do, that if it is to be forced to use an aircraft which will cost a great deal more to operate than the aircraft of its choice, it should have some form of compensation from those who force that decision upon them—namely, the Government. I think this is generally accepted, and I think that the principle of it is accepted by the Select Committee on Nationalised Industries. I hope it is accepted by the Government, but in that case it adds very substantially to the actual cost of at least one of these aeroplanes, and I think we should also bear in mind—

Mr. Deputy Speaker: I am not sure how the hon. Member is relating his remarks to the Order, which, I think he will recognise, is very narrow in scope.

Mr. Corfield: I was going to move on from that, in any case, Mr. Deputy Speaker.

Mr. Webster: Will my hon. Friend not agree that Sir Anthony Milward


argued with great cogency before the Select Committee that if the Corporation were to be diverted from commercial purposes an interest waiver on borrowings would be necessary? Therefore, interest rates would come under this Order?

Mr. Corfield: That was my understanding, that this would put up the costs and would require some form of capital compensation which, I should have thought, would have affected borrowing powers. I am not a financier, and I may be wrong in that matter, but that is how I read the Order.
I hope that the hon. Gentleman will bear in mind about all these aircraft, whether they be further Trident 2s or the Trident 3 or either of the BAC aircraft, the enormous importance which rightly is being attached by the public to noise. This is a consideration which I think is very important, not only in relation to the aircraft; I suspect that in future, at certain foreign airports at any rate, noise may be something for which there may be a penalty, and that, again, may add to the costs of operation of whatever aircraft it may be.
The hon. Gentleman has already referred to part of the effect of devaluation. I was glad he did so, although I had to tear up two pages of my notes, because this was a matter on which I found there was some confusion. I had taken it that the International Air Transport Association fixed fares in relation to current rates of exchange. The hon. Gentleman now tells us, what I rather suspected would happen, that there will have to be an upward revision of those fares, and I take it that that will be proportionate to the devaluation. So that in effect a foreigner will be paying exactly the same in his own currency as he paid before, even though he is travelling in a British aircraft. If that is so, devaluation will not help B.E.A.'s revenue as much as it may be expected to do other types of exports, the exports of goods as compared with exports of services.
As I see it, any increase in traffic we may secure through our rates being marginally cheaper will be largely offset by borrowing arrangements, and if fares do not go up proportionately to the amount of devaluation, then we shall be

earning that much less foreign exchange for the same number of passengers or amount of freight as the case may be.
I think it would be helpful if the hon. Gentleman could also tell us what the effect of the very high Bank Rate will be on the rate on which these loans will be extended. As I understand the situation, B.E.A.'s borrowing arrangements, which, I think, were forced upon the Corporation, not volunteered, are for a period of seven years at the rate of interest which is ruling at the time the loan is arranged and remains payable throughout the period of that loan. If this is the case, I should have thought there were few less opportune moments from B.E.A.'s point of view to bring forward a borrowing Order, if B.E.A. is about to go and collect money at this high rate of interest which will be with the Corporation for this amount of money for the next seven years, as I understand it.
This, I imagine, would accelerate the need for the next Air Corporations Act which is necessary before any further funds can be made available.
I hope, too, that the Minister or his right hon. Friend will bear in mind, again in considering the actual aircraft to be used, the effects of devaluation on making the aircraft more attractive vis-à-vis American aircraft and the import saving effect which the further extension of British aircraft to B.E.A. can have upon our balance of payments.
There remain the two other financial matters which are apposite to this debate. First, there is B.E.A.'s suggestion that it might in future have a capital reorganisation on the lines of B.O.A.C., introducing what I believe is now called Exchequer dividend capital. It sounds a very odd cross-breed. The second point is the problem of the unprofitable services which it operates domestically for social and political reasons, on which losses have been increasing substantially recently and no doubt have accelerated the date on which B.E.A. has had to come to the House for further borrowing powers.
I do not want to form a judgment on the suggestion about Exchequer dividend capital. I know that the Nationalised Industries Committee did not look at it with a great deal of sympathy, and I would not suggest for a moment that I had studied it enough to form a judgment. However, I hope that the Government will


consider at least the effect on morale which it could have. I cannot think of anything duller than B.E.A.'s working for a fixed agreed return on capital assets which it is perfectly possible to achieve while showing a thumping loss on revenue account. It is extremely un-encouraging, whereas the possibility of being able from time to time to declare a big dividend on its Exchequer dividend capital would be more encouraging to those who work in the airline.
As for the unprofitable domestic services, I hope that the Government will get away from any idea of a disguised subsidy in the form of lowering the target and, therefore, increasing the cross-subsidisation between profitable and unprofitable routes and making it impossible to isolate the true costs of those services, but, more important, lowering the whole target and, therefore, lowering the satisfaction which the staff get out of achieving a first-class financial result which, at the moment, is the only way that it has of measuring its success.
After a suitable study of the costs of these services, I hope that the Government will consider what real subsidy is required. Having worked it out and agreed it, I hope that they will then attach it to the services for a period of years and allow other air lines, including B.E.A., to tender for those services. When all is said and done, the independents have pioneered a number of our domestic routes and, as B.E.A. complains, they have now introduced modern aircraft on routes which B.E.A. found it difficult to do and about which B.E.A. finds some embarrassment in the fact that it now has to modernise on domestic routes faster than it would have done otherwise.
I do not believe that this is a subject for complaint. No doubt it has affected their capital programme and the borrowing powers, but the fact is that this is the best possible function of competition. It has forced B.E.A. to produce aircraft which are giving a far better service to the public on routes which otherwise, one suspects, might have become the Cinderellas of B.E.A. If the independents can do it without subsidy, there is no reason why B.E.A. should not be able to compete and give to the public the same advantages in modernised aircraft.
I hope that this consideration and others will induce the Minister to say to the Edwards Committee that the production of new suggestions and arrangements about air licences must be expedited, because so much delay has occurred through tardiness in appointing the members of the Committee.
I am sure that the right hon. Gentleman has read the passage in the Select Committee's Report which makes it clear that there is no sign of any thread of consistent policy in the decisions of the Air Licensing Board, that neither B.E.A. nor anyone else knows where it stands, and that this is no way to develop a domestic or international airline of our country. I hope that the Minister will be able to say firmly that he retracts from the statement that there should be no further independents on domestic routes.
It is significant that another source of B.E.A. capital, which has no doubt affected this Order, has gone in increasing its financial stake in Cambrian and B.K.S. It has done that presumably because it felt that the air routes that those airlines have developed were something worthwhile investing in. The idea that we should abandon for the future this spur to the nationalised industries which the independents have produced in the past, against very considerable odds, I think, would be disastrous for the true interests of British aviation.
Finally—and this ties in to some extent with what I have said about Cambrian and B.K.S.—we are much too much mesmerised, if that is the word, by the belief that this country is too small to fully development domestic airlines. This has been carried much too far.
Wearing another hat, I have been interested for some years in the problem of regional development. When one tries to find out why people are reluctant, despite the financial urges, to go to the development areas—Scotland, Wales and so on—it is a question not of the inadequacy of the bribe, but of communications. Over and over again, as the bigger firms get bigger, we are in danger of the branches of these firms in the development areas away from the centre of communications becoming the subsidiaries to be lopped off first if things go wrong and the subsidiaries which merely do the


production, with all the research and development concentrated somewhere else. But it is the skills that research and development bring that are so badly needed to produce the technological growth within the development areas.
So much of this comes back to the fact that the executive requires to move to these outlying places quickly and, not only to move back, but to be able to get to the nearest airport and move to some of the continental centres straight away without coming via London. There is enormous scope for this and I hope that nothing we do in this House will either undermine the enterprise of B.E.A. or the competition of the independents in opening up those routes, which I believe have enormous possibilities and which are a prerequisite to a really successful regional development policy.

9.13 p.m.

Mr. John Rankin: The hon. Member for Gloucestershire, South (Mr. Corfield) said a great deal with which I agree. Historically, if the Opposition, when they were in power and aviation was developing not only with the nationalised companies but with the independents, had then shown the good sense that the hon. Gentleman has shown tonight, the relationship between the two parties on the necessary development of aviation would have run on happier lines.
We in fact are not discouraging the independents. We are giving them a great deal of encouragement. All I ask from my hon. Friend the Minister of State is that, in the purchase of aircraft, British European Airways will be given all the freedom that is now being given to the independents, to purchase the type of aircraft which it thinks best suited to its needs.
The hon. Member for Gloucestershire, South referred to the importance of developing parts of our country, particularly Scotland, and he instanced the part which the independents could play in developing these somewhat scattered areas of Scotland where population is sparse. On this score, the independents have shown no desire to provide services.
In Scotland we have a magnificent airport, which is known to everybody, and whose reputation is blazoned abroad by

many people. I am, of course, referring to Prestwick, which is not fully used, and which is there for the independents if they want to play their part in opening up the west and north of Scotland, which they are failing to do at the moment. One of our criticisms was that initially, at least, all that the independents wanted to do was to cash in on the pioneer work done by B.E.A.

Mr. Hector Monro: Would not the hon. Gentleman agree that when the private companies take the initiative they are prevented from going ahead because B.E.A. complains to the Air Transport Licensing Board?

Mr. Rankin: I am not aware of any such thing happening. The hearing is public, and it is up to anyone, independents or nationalised industries, appearing at the hearing to defend the reasons for the attitude which is adopted. If B.E.A. feels that it can defend its attitude publicly, it is not for me, within the precincts of this House, to condemn it for carrying out what it feels to be its public duty.

Mr. Fortescue: The hon. Gentleman said that the independents were trying to cash in on the work done by B.E.A.

Mr. Rankin: I said initially.

Mr. Fortescue: As B.E.A. loses more than £200,000 a year on these services, perhaps "cashing in" is not quite the right term to use.

Mr. Rankin: I accept that it may not have been a very elegant phrase, but it indicated the attitude of the independents, for which I did not blame them. Here was a rich route, which in their view was inadequately served. They therefore tried to cash in, or to make cash out of it. I suppose that that is not something that we can condemn, but my attitude was that they should have done what B.E.A. did originally, namely, get out and pioneer the routes. There was plenty of pioneering work to be done, and there still is.

Mr. Speaker: Order. I hesitate to interrupt the hon. Member, but I am not sure whether the independent groups get any finance under this Statutory Instrument.

Mr. Rankin: That is one of our difficulties. The debate was beginning to strike a happy note, because we felt that there was a certain freedom creeping into this discussion which allowed us to explore the matter a little more fully than is possible under the strict rules of procedure. This was because of the tremendous interest which both sides of the House have in this subject.
Towards the end of his speech my hon. Friend said that he wanted to see B.E.A. becoming a fully commercial undertaking. He prefaced that by saying that he hoped the debate would cover a wider area than the Order before us would seem to allow. With his inspiration and your guidance, Mr. Speaker, I am sure that the avenues we try to explore will not be too narrow.

Mr. Speaker: The hon. Member must accept my guidance rather than the Minister's inspiration.

Mr. Rankin: Yes, Mr. Speaker. I take your guidance as a form of inspiration. I want to examine the phrase "a fully commercial undertaking". Under the Order before us, dealing with what my hon. Friend has described as a fully commercial undertaking, I expect that B.E.A. has been able to submit a budget to the Minister for the programme of aircraft that it wants to build, with the assurance that the budget will be accepted by the Minister.
I should like to know how far B.E.A.'s full commercial responsibility was or is being respected in relation to the suggested proposal from another Ministry that it should enter into an agreement with Germany and France on the purchase of the airbus. That is rather important, because this weekend we have devalued the £, with the result that if the work in France and Germany goes ahead Britain will have to provide more £s to pay the francs necessary for the French and the marks necessary for the Germans to carry out their part in the airbus.
That is a most important aspect of the matter, because the Ministerial decision will force B.E.A. to make a decision which it does not want to make because of the cost involved, and because the cost is a matter not just for B.E.A. but also Government funds. I therefore urge my hon. Friend to note the view of the president of Lufthansa, who has said

that on no account will he purchase the airbus if it is ever completed. In that case, France and ourselves would be left to meet an even greater cost.
I take this attitude despite the fact that I firmly believe in the Common Market and in the need for technical cooperation in Europe, because there is the tremendous pressure and menace of the American market. Nevertheless, there is a price which hon. Members on both sides of the House would question before we were willing to pay it.
This is particularly so because B.E.A., seeking to be fully commercial, wants to budget for the BAC 211. I was talking to the chairman of B.E.A. at a function tonight and, when I asked if he still stood by this aircraft, he said that he did and that I should tell the House and the Minister, if I had the chance, that B.E.A. wants it, because among other things it will not present the Government with a bigger budget than at present.
At the same time, this will be an alternative to the scanty market and sales which the airbus will provide. The Italian, the Belgian and even the German airlines want the 211 machine. It will sell and will save Government funds and enable us to do something which we must do in the months ahead—economise. I therefore ask my hon. Friend to consider seriously whether he is going to try to make B.E.A. fully commercial, and to remember that if, unfortunately, speaking for the Government who want B.E.A. fully commercial, he forces on them the Trident 3B with a subsidy, that aircraft cannot, by itself, be run commercially.
Already, his colleague is promising B.E.A. that, if only it takes the Trident 3B, it will get a subsidy as well—which B.E.A. does not need for the BAC211. Surely my hon. Friend will be convinced that logic, economy and good sense are on the side of those of us who ask that when B.E.A.'s next budget is prepared and costed, with the help of the Government, the new aircraft for the Corporation should be the most profitable and the least costly to the Government—the BAC211.

9.29 p.m.

Mr. Henry Clark: This debate is a useful opportunity to discuss B.E.A. and there must be a temptation to carry it beyond the bounds of the


Order. I hope that I will not be out of order if I stretch it no further than did the Front Bench speakers.
No one with the interests of British aviation at heart could oppose the Order. Aviation, particularly civil passenger and freight-carrying aviation, is a growth industry. A growth industry must continually go to its shareholders for capital and, in asking for additional borrowing powers, B.E.A. is behaving like a competitive, private enterprise airline.
One question which we must ask is whether the money for which it is asking is enough. I apologise to the Minister, but as the debate started rather earlier than we had expected, I missed the first part of his speech, but I presume that this increase in borrowing powers is purely an interim measure. I certainly hope that it is.
We must look very seriously at the question of capital for our growth industries, whether they are nationalised or commercial enterprises. In an industry of this size, it is essential to grow, and for that purpose inevitably more capital is needed. There are signs that B.E.A. are not getting enough capital to meet their growth potential. If an industry with a large growth potential is strangled for lack of capital, as can happen in both commercial and nationalised industries, that is a very serious situation, particularly if such an industry has then to scrape together its capital for various developments out of its profits and has to maximise profits on some routes in order to get other routes off the ground. Indeed, I should be happier if the House were debating a much more generous Order giving B.E.A. larger borrowing powers.
There is a good example of this situation. It is the example of the London-Belfast route, the air line on which I and my colleagues frequently travel. Almost every autumn I put down a Question to the Minister who, in reply, informs me that the growth of traffic through Belfast airport has been 13 per cent. or 14 per cent. That is a consistent figure. It is a wonderful trade where one can guarantee an increase of 13 per cent. or 14 per cent. in business every year.
There is clear evidence in the findings of the Air Transport Licensing Board that B.E.A. has been making money on

the London-Belfast route. It was making money even in January, 1966, which was not the happiest time for profitability. In paragraph 65 of the Decision of the Air Transport Licensing Board of 5th January, 1966, there are clear indications that B.E.A. was making money on the Belfast route. Then paragraph 66 gives details of why it was making money on the Belfast route—partly because of the type of aircraft and the fact that freight could be carried in the hold of the Vanguard and it was not necessary to run a separate, regular Argosy service. It is a happy position for it to be able to make profits on this route even at a time when operations generally were not profitable.
This was confirmed at the end of July this year in another Decision by the Air Transport Licensing Board. In paragraph 27 the Board said that on some routes—there is little doubt that London-Belfast was one—B.E.A. was making profits. Incidentally, that was the hearing at which B.E.A. was trying to raise its fares. The Board said:
In particular we took note of B.E.A.'s assurance that they had not applied the principle of maximising revenue on trunk routes and were proposing to take from profitable routes only such surplus as was necessary to make good inevitable losses elsewhere.
That is an indication of what B.E.A. is, in fact, having to do. It is having to milk the profitable routes, such as the Belfast route—it has added 10 per cent. to its fares and is cutting out the potential growth of that route—in order to put capital into other routes such as that to the Highlands and Islands of Scotland. I agree that such services are necessary, but as an Ulsterman I cannot possibly agree that the Belfast route, which is a vital link between the industry of Northern Ireland and the rest of the United Kingdom, should be milked in order to help the Highlands and Islands service, highly admirable though the latter may be.
B.E.A. should be given more capital to provide that service and build it up to profitability with the right sort of aircraft. The Corporation should not be forced, because of the lack of capital, to milk a vital route like the Belfast one; and the addition of 10 per cent. to the cost of fares will inevitably cut down the growth potential of this route.
Last night—it was entirely my fault—I missed my aeroplane. It happened because the B.E.A. flight was on time. I had to wait for the next aeroplane and, while waiting, I had an opportunity to chat with various members of the airport staff. They told me, from personal experience, the sort of feelings that this 10 per cent. increase in fares had caused. They told me that businessmen did not appear to worry too much, but that for the ordinary man and wife it was an imposition to have to pay £38 12s.—the best part of £40—to travel from London to Belfast for the weekend. Indeed, several travellers had almost sunk into the ground when told the price of a ticket, and I cannot blame them.
Whatever fares should be charged, if we are to have a real growth in traffic—the growth that B.E.A. needs if it is to become a great airline—a 10 per cent. increase in a route which is already making money and on which there is increasingly effective competition from an independent airline seems to be madness.
There are also social aspects to this problem. It is all very well for hon. Members to sign warrants when travelling. Perhaps we forget the cost of air fares to ordinary citizens. The businessman may not pay the money out of his pocket, but it is paid by his business and must come out of the profits. It must be deducted before dividends are distributed. That aside, increased fares are particularly hard on young people, many of whom are working, studying or training here in London and want to fly home as often as possible to be with their families and get a breath of fresh air in Northern Ireland or some other outlying part of the United Kingdom.
B.E.A. has put forward schemes for young travellers but fares increases of this sort reduce the travelling public, and they help to keep families apart. More capital should be made available and the Government should be more generous in making provision for B.E.A. to borrow. I appeal to the Minister to ask B.E.A. to think again about milking the profitable routes to build up its capital to finance the unprofitable ones.
The social and business interests of Northern Ireland are bound to be affected

by this increase in fares. Although I do not see why devaluation should mean an increase in fares on internal routes, we are told that there may be yet another increase as a result of it. If fares are allowed to go up yet again, it would be a serious blow to our attempts to bring new industries to Northern Ireland. The last increase was a retrograde step for regional development in Britain and a retrograde method of financing a growing nationalised industry.

9.38 p.m.

Mr. Robert Howarth: I apologise to the two Front Bench Speakers for not being in my place when the debate began. I gather that, like myself, certain other hon. Members were rather overtaken by events. I assure both Front Bench speakers that I look forward to reading their remarks in full in tomorrow's HANSARD.
I was inspired by the remarks of my hon. Friend the Member for Glasgow, Govan (Mr. Rankin) to comment on the problems that have been affecting B.E.A. in the last 12 months regarding the Corporation's re-equipment proposals. As I heard my hon. Friend giving vent to his views, I thought it should be said that many people interested in or connected with the aviation scene take an entirely opposite stand.
Ever since what I would call the remarkable B.A.C. proposal was conjured up out of the air to build for B.E.A. a twin engined 190-seater aircraft, I have been reluctant to believe that this is the answer to both B.E.A.'s need and to the British aircraft industry's need for an aircraft which will achieve a measure of world wide sales.
Having taken the trouble in the last 12 months to look at this matter very closely and to discuss it with as many people in the industry as possible, both here and abroad, I still think that the best course open to B.E.A. would be to take the Hawker-Siddeley Trident 3B as an aircraft to fill the gap in capacity that is clear to everyone to see before the European airbus comes along. It is from that end of the scale that I want very briefly to explain my reason—

Mr. Webster: Did the hon. Member ask the opinion of B.E.A. on the subject? If so, he did not pay much attention to it.

Mr. Howarth: I am, of course, aware of the opinion of B.E.A. on this subject. I also know that at one stage the Chairman said that he would like to take the Boeing 727–200, and that the Government have decided—and I fully support the decision as, I believe, does the House—that B.E.A. are not to be allowed to buy American aircraft.
The argument therefore boils down to a choice between the BAC 211 and the Hawker-Siddeley Trident 3B. In view of what I feel is the very limited market open to aircraft of the size of the BAC 211—which would only be coming into service four or five years from now—I can see no good reason why the Government should not only support the European airbus, as I believe they should, but also an aircraft tailored particularly to B.E.A. needs. My hon. Friend the Member for Govan spoke of all these airlines wanting this machine—I only wish they did. It would be nice to think that options from any airline existed for the BAC 211, but that is not the case. One has only to look at the very interesting editorial in the current issue of Flight International to see that the magazine takes the same view as I and others, which is that to fill this gap in capacity required in the next period—that is the early 'seventies until, roughly, the 1974–75 period—it would be as well to have an aircraft that would match the large fleet of Tridents, some of which are coming into service now—

Mr. Rankin: The figures I gave were based on an estimate provided by Mr. Stephen Wheatcroft, who has been accepted as a reliable estimator. There is no corresponding estimate for the airbus.

Mr. Howarth: It might be as well to deal with the merits of the BAC 211 versus those of the Trident 3B rather than introduce the airbus into this equation, as the European airbus is on quite a different time scale. It is generally recognised that the European requirement for the airbus comes in about the 1974–75 period, but we are now talking of the very urgent requirement B.E.A. has to fill several years earlier than this, and which I believe can be filled by the Trident 3B.

Mr. Onslow: To complete the picture, can the hon. Member tell us how many

options B.E.A. has taken on the Trident 3B?

Mr. Howarth: The same as for the 211, precisely zero. The Trident was tailored, and, precisely because it was tailored to B.E.A. requirements, it has proved somewhat smaller with a less attractive field performance than the Boeing 727 and it has not sold as the Boeing has. The Boeing 727 has been the most outstanding jet passenger aircraft ever built. The 3B, if it is ordered, could present to the Government a bill considerably smaller than that involved in the launching costs of the BAC 211. The estimated launching cost of the BAC 211 is £100 million, whereas it is £17 million for the Trident 3B. If we work out the economic running costs, the launching costs need to be taken into account. On that basis a better bargain would be struck for this country by B.E.A. taking the 3B, and mating it up with the large number of Tridents it has. This would make it the possessor in the early 1970s of BAC 111 and the Hawker Siddeley Trident fleets Marks I, II and 3B. This makes sense. Having looked at the presentation by both companies of these aircraft, I have no reason to change my view.

Mr. Fortescue: Would the hon. Gentleman comment on suggestions that the 211 is likely to have the supreme advantage of being the quietest aeroplane yet built, even quieter than the Vanguard and far quieter than any plane yet on the drawing board?

Mr. Howarth: I have seen these claims and would like to think that they will be turned into fact. Whether they are exaggerated I am not sure. I have read the claim that this aircraft may be able to operate—I concede the point—without some of the restrictions which at present plague night operations for many aircraft in this country. But on balance, if we are to continue with the support, as I believe we should, of a European airbus, we are clearly limited to giving support only to the Trident 3B and not to the BAC 211. I do not see how the Government could find money for launching both these major projects.
Although it might be nice to think that we could build such an aircraft which would command wide markets, one has to be realistic and to recognise


that all the civil jet airlines we have built in the last decade since the days of the successful Viscount have been plagued by the fact that we did not have a large market and a basis from which to work. This has affected our costs. Therefore, I take the view that the European airbus is the aircraft in which we should put our major effort and as an interim measure we should persuade British European Airways to take the Trident 3B. That seems an attractive aircraft. I understand that it has been further stretched. It would return quite good economics—though not so good as the Boeing 727–200—and I think everyone is agreed that it would be most desirable for British European Airways to operate that particular type.
I make a general comment on the question of the services operated in this country, particularly by B.E.A. but also by other operators. I had the rather enlightening experience last month of spending three weeks in the United States. Travelling from many major centres, I was staggered by the success of the American air transport industry extending into a new mass market. Clearly, they are doing this on the basis not of raising fares and therefore possibly lessening the market for air transport but by cutting fares and giving many inducements to people to travel by air. One literally sees an explosion in air transport which is a spiral going upwards instead of downwards, as in this country, which we achieve by pushing up fares, thus restricting the market, increasing costs and thereby bringing in further excuses for raising fares.
It would be nice to think that we might break out of that pattern. It is all too easy for politicians to give advice to those running the airlines in this country, I confess. Our airlines are facing stiff competition from other European airlines. B.E.A. is the major European carrier and it has done exceedingly well. But when one sees the success of American airlines and considers the fare levels achieved by them, one realises that we have a great deal to learn from them.
I was equally pleasantly surprised to find—and I hope that my hon. Friend will note this, because it is worth investigating—that, everywhere I went my wife, who was accompanying me, travelled at

two-thirds of the full fare. Had my children been with me, they would have travelled at one-third of the full fare each, so that the four of us as a family would have been able to travel at the cost of about two adult fares. The American airlines go out of their way to persuade people to travel by air.
I, too, query whether the provision of the capital in this Order is sufficient. Are we recognising the growth potential which exists and of which B.E.A., if given the facilities, could presumably take advantage? I hope that B.E.A. will be able to overcome its temporary shortage of capacity early in the 1970s in the manner I have described and that we can look forward to B.E.A., Air France, Lufthansa and other European airlines by the mid-1970s operating a European airbus partly built here and partly built in other European countries.
I hope that, emulating America, we will have achieved a mass market in air travel. They have done it on the basis of offering services incomparable with anything I have yet seen over here and at fare levels which are quite remarkable. I hope that B.E.A. will look closely at the experience of American operators. The sooner it does so, the better it will be for our travelling public.

9.54 p.m.

Mr. David Webster: The information given in this Order is, to say the least, sparse. It tells us that shortly the amount of money is to be increased. It is rather late, since the limit will in any case probably expire by March. It also states that the Order was laid before the House of Commons in draft in 1967. No date, or even month, is given. It says that it is to come into operation in 1967 and it is difficult to tell exactly when it comes into effect.
That is all the information we have. At the bottom there is the date "1967", again with no month indicated. I hope that the Minister of State will tell us when the Order was made and when it comes into operation, because these are matters of some substance as we are getting rather near the bottom level of borrowing.
I acquit the hon. Gentleman of any discourtesey. He is always courteous. He and I juggled night after night with the Anchors and Chain Cables Act, and


I certainly do not want to repeat speeches I made then. I thank the hon. Gentleman for his courtesy and for explaining the problem of the travel allowance and how it will affect the fares and revenue of B.E.A.
Since the travel allowance was brought in, Sir Anthony Milward has repeatedly complained that it is having a deleterious effect on the revenue of B.E.A.
Now that we have devaluation, which is reducing the value of the travel allowance very considerably, I would have thought that we would need from the sponsoring Ministry a new estimate of what will be the peak Christmas traffic and the Christmas peak revenue. There will be many cancellations when would-be passengers look at the travel allowance after devaluation and the interest rates and other things which will require us all to tuck our belts in and there will be a very sharp drop.
With the progress payments that have to made on aircraft, and also the fact that the I.A.T.A. 45-day period after devaluation can be got round because of an emergency meeting of I.A.T.A., which I understand is happening this week, it would mean that fares would probably be put up a good deal before the expiration of 45 days, thus ruining the Christmas trade.
This will have a devastating effect on the economies of the Corporation during one of its most critical times. It seems as if there will be a risk of this extra tranche of borowing expiring in February and not March. I want an absolutely firm undertaking from the Minister of State that we will get the new Borrowing Powers Bill, because this is what will be required, before the money expires. We have had it on previous occasions after the money has expired. I hope that the Minister will look at this carefully and make sure that Parliamentary time is given.
There is also the redemption of stock. This is a difficult problem. We have a £93 million borrowing situation, with average interest rates on this of 5·2 per cent. and costs of £4·459 million to service, If, under the new Borrowing Powers Bill, there is to be the type of capital reconstruction that the Corporation seeks and which it calls equity capital, and I call nothing of the sort but simply a

straight dividend waiver, the House will want to examine this situation thoroughly because the different structures of borrowing interest are very difficult in this Corporation.
When it gave evidence to the Select Committee we rather reluctantly came to the view that it did not take the financial objectives laid down in the White Paper, Cmnd. 1337 particularly realistically. It is not altogether difficult to find out why this is so. The Highlands and Islands route has been taken into account by reducing the earnings on capital invested from 6½ per cent. to 6 per cent., a drop of approximately £300,000. This includes the Scilly Isles, which I would like to leave out anyway. There is the difficulty of the Corporation as against the independent operator.
If the Corporation is to be allowed preferential treatment, regarding interest paid–5·2 per cent., which is taken into account after the earnings of 6 per cent. on capital—this is very different from the independent operator who is probably paying no less than 10 per cent. to the bank for his overdraft. I am not sure what the prime bill rate will be after devaluation. That would probably become about 7¼ per cent. I see that my hon. Friend the Member for Worthing (Mr. Higgins) is getting out his computer to work it out. It will be a much higher rate for the prime bill rate than for the interest paid on the small amount of capital that we are giving this evening.
As we so frequently saw in our transactions in the Select Committee, if one has management deflected from its prime function, which is surely to account for its assets and get the maximum earnings from them, we find again and again that it is the management of a nationalised Corporation.
The hon. Member for Bolton, West—

Mr. Robert Howarth: Bolton, East.

Mr. Webster: East is East and West is West, but maybe occasionally the twain will meet, and both become Conservative at the next election.
The hon. Member for Bolton, East (Mr. Robert Howarth) rightly said that almost a year ago today B.E.A. was told that it could not buy the Boeing 727. That being so, it looked for British aircraft, and in about February or March opted for the


BAC211. I think that it was not until March that it chose the 211, and, in fairness to the Government, it could not do more than to say that it was not the aircraft it wished to have, but could not give very precise specifications. Then there was delay and great suspense. It appears to me that the Corporation, the people appointed by the Minister responsible to Parliament to run the industry, decided that if they could not have the Boeing they wanted the 211. In those circumstances, if one twice takes from the management of an industry the right to select the aircraft of its choice one is doing something wrong for the industry.
It is said that we must now allow B.E.A.—there are so many initials in the debate that it is very easy for somebody as confused as myself to get into complications about this—to opt for a tailormade aircraft. In the case of the Trident there is a potential market of 400, and Hawkers opted for a market of 40 to give a tailormade aircraft. I do not think that this was good for B.E.A., and certainly not for Hawkers who said in evidence that they would never willingly do the same thing again. Yet they have, because the Trident 3B is no more than a tailormade modification of the Trident for the purposes of B.E.A.
The BAC211 has been brought on very rapidly, but it would be the first of its type for the market for aircraft of about 200 passengers—the hon. Member for Bolton, East said 197 passengers and the figure I have is 203. It is estimated that there is a potential market of between 1,500 and 2,000 aircraft and it is one which the Americans have neglected. There is considerable potential, and B.A.C. might sell between 400 and 500 of such aircraft, with a possibility of earning £750 million, much of which would come from overseas.
Last week at the Mansion House the Prime Minister gave the latest modification of the "white heat of technological break-through" speech, and spoke about a technological community. I would remind him that it is no longer only the airbus that is international, for B.A.C. is negotiating with Sub-Aviation, which is very happy to sub-contract for 50 per cent. of the airframe work on the 211. Other foreign companies could well come

into this. Many of the foreign airlines, particularly Alitalia, are most interested in the project.
In addition to the problem of the aircraft there is the problem of the engine, which may be more important. With the RB211, Rolls Royce is trying to get a very important contract with Lockheeds, and Lockheeds will reasonably say, "If you cannot sell this engine to a British airframe company we are not interested in it." I am certain that one of the reasons the nuclear power group failed to get the Belgian contract for an advanced gas-cooled reactor was that a reactor of this sort had not been bought for use in this country. Therefore, the Belgians could say, "You have not shown confidence in the reactor yourselves. Why should we buy it?" If we do not have the BAC211 and the RB211 engine, Lockheeds are likely to use exactly the same arguments.

Mr. Robert Howarth: When the hon. Member cuts out his asinine political asides, he makes, I suppose, a reasonable case. Surely, the test here, in view of the claims which the hon. Member is making for the BAC 211, is to set it against American practice. Probably the greatest present day manufacturer is Boeing. If it puts forward an aircraft which, it claims, has the sort of market which the hon. Member is claiming for the BAC 211, it goes out and finds its own money. Surely, B.A.C. could go out and see whether it could raise the money to build the sort of aircraft in question, but it does not do that. It asks the Government for £100 million. This is one of the keys to the decision which has to be taken.

Mr. Webster: I am glad that the hon. Member has raised the point, because I hope that the Minister of State, who is, I see, consulting the usual channels, can tell me whether B.A.C. has offered to put up some of the money itself. I repeat that. I hope that the Minister can tell me whether B.A.C. has undertaken to put up some of the money. This is a point of substance and we would like an answer from the Government.

Mr. Onslow: Perhaps, when the Minister devotes himself to the point, he might also tell the House whose money has so far been spent on the BAC 211. Is it B.A.C.'s money or have the Government put any money into it?

Mr. Webster: If the Minister of State has taken his notes on that, which, I see, he has not, and has digested the question and stopped talking to somebody else and can now answer whether B.A.C. has offered to put up any money for the project, I would appreciate an answer, because it is not on the record.

Mr. J. P. W. Mallalieu: I can answer right away. B.A.C. has put up a small amount—I do not know how much—just to keep the research going.

Mr. Webster: I was not meaning to be discourteous. I know that if a Whip speaks to a Minister, it must be an important matter and the Minister has to attend to it.

Mr. Mallalieu: I was checking one of the hon. Member's earlier questions.

Mr. Webster: I appreciate that, but I wanted to have the reply on the record.
I think that the hon. Member for Bolton, East, whose disapproval of my politics makes me more confident in them, will agree that if we have a Trident 3B carrying 146 passengers, it is the end of the line, and if we have the BAC211 carrying over 200 passengers, it is the beginning of the line. These industrial companies do not make estimates without having to follow them up with a good deal of their own endeavour, unlike those of us in this House who do not have to venture one's commercial judgment. I see that the hon. Member agrees with me. The difference is between the winding up of an old series and the start of a a new one. That is the key.
If we go straight to the airbus for about 300 passengers, that is a conjecture some way ahead. I am thinking of the interim period and I believe that both the company and the Corporation are thinking of the interim period, when they could be out in the cold. We know that the Trident was brought on because the Caravelle was taking a lot of passengers away from the great prestige routes of Europe. The same could happen here.
I do not want to digress too much on to procurement, but as, we understand. the Board of Trade and the Treasury seem to be keen on this subject and the Minister of Technology or his Minister of State seems to be leaking against it, although I know that the Cabinet has

been busy during the last few days, I hope that we may be given an assurance that every care will be taken in reaching a decision which, once taken, will be irrevocable; and it could well be that the future of our aircraft industry would collapse if this engine and this aircraft were not allowed for B.E.A. I hope that sound judgment will prevail and that biased views, as the hon. Member for Bolton, East put at one stage of his speech about talking to people and then completely ignoring the evidence which they have put forward, will be ignored and that the merits of the case will be seriously considered.

10.10 p.m.

Mr. R. F. H. Dobson: I do not wish to follow too closely what the hon. Member for Weston-super-Mare (Mr. Webster) has said this evening, but I should just like to take up one point because, through an interruption, I think my hon. Friend missed it. It was that if the Government decide to put money into the 211 that virtually means they have to supply the complete cost of the aircraft, not only cost of research, which is carried on in a very minor way at the moment, but 100 per cent. of the cost. The hon. Gentleman may like to find his own reference to that in the Second Report of the Select Committee on Nationalised Industries where this was made very plain by the spokesman of the Ministry of Technology.

Mr. Ian Mikardo: And the manufacturers.

Mr. Dobson: And the manufacturers, as my hon. Friend reminds me.
I want to talk about procurement policy, because it is very germane to this Order. I realise that the Order is about things which are needed at the moment, but I believe there is need for the Government to make a firm decision soon about procurement, and it seemed to me that my hon. Friend the Minister of State would like to hear some views about procurement policy.
The Government were absolutely right to deny B.E.A. the right on this occasion to purchase the Boeing the Corporation wanted. One can only regret that the decision was not accompanied by some lead from the Government Departments concerned about what aircraft


should be used to replace it. The Select Committee in its Second Report suggests that there is need for Government Departments to discuss much more fully with manufacturers—and the hon. Member for Gloucestershire, South (Mr. Corfield) said this as well—with the industry and with the airlines, the real need, which is for the types of aircraft for the routes, and detailed specifications, which do not seem to have been produced so far. I have my doubts whether we can at this stage say that for all time procurement policy should be to buy British. The query instantly arises whether the airbus will be a British aircraft. I understand that we in this country will get very little of the airframe work, and that we shall be very fortunate to get all the engine side, judging by the way negotiations have gone so far.
I thought, too, that the Committee which looked into this recently was absolutely right to stress the fact that from now on in procurement matters we should not think of tailormade aircraft for certain airlines. This has been a fault in the past. I know that the Minister of State appreciates this and I think he takes the same view. This does not, of course, mean that aircraft should not be used properly on the various routes for which they are required.
The difficulty for B.E.A. is that it has two types of route, the internal route and the European, and this causes some dilemmas. Nothing we decide in this House, except in the political sense, will help the Corporation in the choice it makes, and the choice it makes has to be of an aircraft which suits both routes, with conflicting problems, an aircraft for which, in the end, the money will come from the taxpayers of the country, or in some other direct way. That is why I think that the larger groupings of aircraft is a sensible thing to suggest.
This is why I am in some difficulty about deciding whether or not the Trident 3B or the BAC211 is the correct aircraft to suggest to my hon. Friend, who seemed to be asking for ideas. On the one hand if the 3B is virtually made for B.E.A., the BAC211 would be tailor-made for B.E.A. and we seem to be in deep water whichever one we choose. I can appreciate the Board of Trade's dilemma in its choice The delays must

be wearing to everyone concerned. It cannot be any consolation to B.E.A. or to the aircraft manufacturers to know that a decision which has been awaited for almost a year is still awaited today.

Mr. Rankin: It will help my right hon. Friend to come to a decision if he realises that the Trident 3B must have a subsidy, whereas the BAC211 does not need one.

Mr. Dobson: I accept that immediately, but I remind my hon. Friend that, while the 211 does not need a subsidy, the Government will have to provide the complete manufacturing costs, which in themselves will probably add up to at least as much as the Trident 3B. That is the dilemma facing the Government, and I think that my hon. Friend the Member for Glasgow, Govan (Mr. Rankin) understands it.
It would not be germane to the argument to give the Minister of State any idea other than that we wish him well in his decision, when he comes to make it, but we hope that he will not make it before coming up with some clear ideas on the subject.
Another aspect which is equally important is that relations between the Board of Trade and B.E.A., I feel, have not been very warm, friendly or useful in the last year. There has been a lot of wrangling in a way which does not help an airline and certainly does not help the House to look at matters in a rational way. The procurement policy is at the back of it, no doubt, but it leaves us with the difficult problem of what to do about relations between the two and between the aircraft manufacturers and the Ministry of Technology, which seem to be fraught with difficulties.
The fault is not entirely on the side of the Board of Trade. B.E.A's attitude towards its statutory limit powers was remarkably stupid, and it ought to have thought a little more before advancing the arguments to the Nationalised Industries Committee that it did. They did it no credit.
It is accepted that, if we are to be involved in a lot of expenditure from this House, there must be some supervision in a direct sense by the Board of Trade. However, there is a danger in too much direct and constant supervision. A supposedly independent board


is running a commercial airline, but, because it is now taking and using astronomical sums of money a large proportion of which comes from the Government, it means that it has a very difficult duty to discharge. Until recently, we said, "Go ahead. Have a completely commercial policy, and come to us if you cannot make it." If we now say, "Have a commercial policy, but we shall have to subsidise certain aspects of it or get you out of difficulty when necessary ", that is quite another matter and calls for a different attitude from the Government and from B.E.A., in their relations with each other. I hope that the next year will see some change in that.
I have been a little concerned about B.E.A.s attitude in the present dispute with its pilots, which now seems to be moving towards the withdrawal of the

British Airline Pilots' Association from the National Joint Council.
I hope that I can impress upon my hon. Friend the Minister of State that it ought not to work in the same way as the B.O.A.C. Board has done in its negotiations with its pilot staff. I cannot for the life of me believe that that is the right way to treat staff of this calibre and type. I hope, if he obtains anything from the debate tonight, that he will look at this side of staff relationships very critically indeed. This is vital, because if we have a crippling strike, or even a reduction of working, such as exists at B.O.A.C., it can do nothing but harm to the accounts next year and to the way our airline, in which we have great faith and which we strongly support, is put over to the general public.

10.21 p.m.

Mr. Nicholas Ridley: Everyone who has spoken so far has been very knowledgeable and very clever about the BAC211 and the Trident. I confess that I have not the faintest idea which of these two aircraft is the better, nor, I think, has the Minister. I do not think that he should have any idea, because it is not his job to decide. I see no point in setting up an independent Board, such as B.E.A., with all the knowledge and expertise in its own business, and then taking its important decisions for it. Why can we not allow it to take its own decisions? I would have thought that it was absolutely right that we should leave it alone to manage and cease to interfere, and, what is more, cease to delay it taking its own decisions.
If for balance of payments or strategic reasons, we wish to prevent or discourage British airlines from buying American aeroplanes, why do we not put a tariff on American aeroplanes? If one wanted to discourage something very much, one put on a big tariff. To try to have all the advantages of a tariff without actually putting it on is bound to result in the sort of endless muddle and confusion which is characteristic of every single major purchase which either of our airlines has tried to make in recent years. It would seem difficult to retrieve the situation now, but at least we should make some attempt to allow B.E.A. to manage its own house and only compensate it if it is required to do something which is strictly non-commercial.
One example is the Highlands and Islands service. It is known that this has cost between £167,000 and £356,000 in losses in various ways of the last five years and it is expected to average a loss in future of about £300,000. It is right that this service should be provided and it is a fair charge upon the taxpayer, but I do not see why the other travellers on B.E.A. should provide it. Why people travelling to Edinburgh or Belfast should be asked to provide this I cannot see. The only correct way to finance this loss is to pay a subsidy through the Department of the Secretary of State for Scotland which he would then make available to the airline performing the service The only fair way of determining who should run that service is for all the

airlines, including perhaps, for all I know, foreign airlines and certainly the independents and B.E.A., to quote for doing the task which is required by the Secretary of State for Scotland. Everybody will then know what they are trying to do and will be clear as to their obligations, and the public at large will be aware that it is spending so many thousand pounds on a subsidy for this service and we in this House, if we like, can object to it or say: why not pay more? We can augment it or subtract from it.
The gist of the Select Committee's Report is that this should be done. I hope very much that the Minister will agree to do it. If not, it makes nonsense of Select Committees. What is the point of the Select Committee making this Report? I hope very much that the Minister will follow the recommendation in both these respects, particularly with regard to aircraft and I quote:
Your Committee attach the utmost importance to the principle that any imposed decision is identified and that the full effects of the decision should be made abundantly plain in B.E.A.'s annual Reports for as long as they continue to be reflected in B.E.A.'s trading results.
The important word is "identified". I am certain that all the interferences, noncommercial pressures, and so on, must be properly identified. The worst way is to write into the new capital structure, or the borrowing of the airline, some indeterminate amount to compensate it for something which is non commercial and the benefit of which is unmeasurable. This is the vaguest and most irresponsible way in which we in this House could conduct our financial business, and I am very much relieved to see the strength with which the Select Committee rejected any such suggestions.
B.E.A. is asked to make a profit of about 6 per cent. on capital. This is its target. This, presumably, is what it will be asked to earn on the capital that we are lending it tonight. I do not see why we should limit it to 6 per cent. The trouble with a target is that it implies that one must not make any more than 6 per cent.— one must not make less, and one must not make more. B.E.A. proudly proclaims that it has made just about this target in the past, but, being in full unfettered competition on practically every route, it could be charged


to make as much as it can, and if it can make 20 per cent. good luck to it. It would be doing very well, and would be making it against very stiff competition. So I see no reason for a target of that sort.
Moreover, a target does not reflect the cost of borrowing. The average interest which B.E.A. is currently paying on its capital is about 4·3 per cent. It is paying £4·3 million on about £100 million working capital. It is being asked to make 6 per cent. from now on, on its new borrowing. Presumably it will be charged 8½ per cent. or 9 per cent. interest on it. There are all these different rates of return. If we want to reflect the true value of the capital to B.E.A., we should charge it more on its existing capital, and more on new capital, to make a fair comparison with the rates which private enterprise, its competitors, might have to pay, and for the much more important reason that we must make the rate of borrowing correspond in all cases to the availability of savings for investment.
Currently, we are under-saving. We are under-investing, too, but as we are greatly under-saving we ought to lend to the nationalised Corporations at rates which reflect the scarcity of the savings which they are using. I would say that the current scarcity value of capital is about 10 per cent., yet here, we have B.E.A. paying 4·3 per cent. I propose that we have a special tax whereby we do not say, "Make 6 per cent.", or give a target of 8 per cent., but put a tax on the borrowings. I suggest that we should augment the borrowing rate to reflect the true cost of the resources which these industries are using.
This would cut out the ridiculous anomaly which exists, because although the Treasury may say to B.E.A., "You must apply a discount rate of 8 per cent. on new borrowings", it will be asked to pay only 4·3 per cent. The difference between 8 per cent., and 4·3 per cent., that is 3·7 per cent., becomes additional profit to the Corporation. It becomes additional money to its own budget, which means that the effect of trying to make capital more expensive, to make investment more expensive, to B.E.A., in all cases will be simply to increase its profits, which will have the effect of giving it more money to invest in future because it has made

a bigger profit. This anomaly runs through the nationalised industries but is particularly strong in an industry like B.E.A. which has a large amount of old capital which it borrowed at cheap rates.
B.E.A. has asked for some Exchequer dividend capital, which means, as far as I can make out, that it wants to have one chunk of capital at rates of interest which are not specific. This means that it can fail to pay interest when it feels like it and pay rather more if it has made a better profit. This conception is utterly meaningless, because the whole of B.E.A. belongs to the State, and if it makes a huge profit in one year it is the State which benefits—the entire increment goes to the equity—but if it does badly we have to pay the entire loss. There is not a single minority shareholder in B.E.A. who can either profit or lose, so we get the entire good and the entire bad in different years.
Therefore, to try to codify this by putting a slice of capital into the capital structure of the Corporation, whereby the profits and losses can be identified, is not helping; it is quite meaningless. We can do it already by making a big or little surplus, after paying interest on the stock.
I suspect that the plea by B.E.A. is an attempt to get a piece of capital into its capital structure on which it will not have to pay interest at difficult times. The least we can ask, as taxpayers, is that these great Corporations in State ownership should always at least pay the interest on their capital, and for B.E.A. specifically to ask for interest-free capital in some difficult years seems to be totally wrong. The Select Committee came down strongly against this, and gave some very strong reasons in addition to those that I have mentioned. I hope that the Minister will confirm that this idea is sunk and dead, as it should be for B.O.A.C. as well, and that it will not be repeated as an experiment.
One thing that we might be able to do is to offer a few more options to B.E.A. or other industries which are raising new capital. There is no reason why there should not be borrowings available in the Treasury for short or long periods. There could even be some undated stocks which they could borrow. There could be all sorts of gimmicky


stocks, which could vary with the cost of living or with imports or exports, or some other factor, and the airline could then choose when to borrow and which of the various categories of stock at different interest rates it wanted to borrow. This would give it some more flexibility. I do not believe that it is possible to give it anything like the flexibility of a private concern, but it would give back to management a little of one of the prerogatives of management, which is to pick and choose, between available options, the one most suitable to itself.
We must them consider whether B.E.A. is the right size. In my opinion it is in the position of a giant amongst a large number of very small private airlines. This situation does not make for good competition either on our international routes of our internal routes. There is a strong case for dividing B.E.A. into two or three smaller units. They could perhaps serve different parts of Europe. Real competition between the parts might then be possible. Their performances could be compared. On the Highlands and Islands or much more important and profitable routes they could compete side by side or with private airlines and the rigid structure would be broken up.
The only argument against such a policy might be that economies of scale necessitated airlines being as big as B.E.A., but we know that this is not true. Swissair and Scandinavian Airlines are both much smaller. There are many examples of smaller airlines which are performing much more efficiently, so we should always consider not only making industries more monolithic but also breaking them up to achieve effective competition in which they can show their paces.
I wish B.E.A. well. I believe that it has performed well in the past, but, if we are to be excluded from Europe and perhaps from American association or any other larger grouping, we must get used to providing the desperately needed competition from within our own shores. The only way for the airlines is to do as I have said.

10.37 p.m.

Mr. Tim Fortescue: The Minister said that this is

an interim Order but did not say just how interim it will be. It allows B.E.A. to borrow an extra £15 million. They still have £10 million in hand before they reach the already authorised £110 million, but they have on order £72 million worth of aeroplanes, towards which they have paid only £18 million, and this does not take into account the order which must come soon, either for the BAC211 or the Trident 3B. So the requested sum is only a small proportion of the money which B.E.A. will need in the near future, amounting to £210 million in the next few years. Beside this, £15 million looks very puny.
I interrupted the Minister, when he said that part of the money would be used for B.E.A.'s new building at Heathrow, to say that I understood that it was to be rented, and he said that B.E.A. was buying it. I would refer him to Question 1696 of the minutes of evidence before the Select Committee on the Nationalised Industries, in which Mr. Marking, the Chief Executive of B.E.A. said:
I believe the cost of operating Heathrow is likely to go up rather than down. The new building will certainly make it much more efficient, but the rent we will have to pay will be very large …
That implies that B.E.A. will be renting the building and not buying it, and I should be grateful for clarification.
We have also heard that financial discussions with B.E.A. were promised to define the new financial objective—the present one lasts only until next year—in the autumn of this year. Are these discussions proceeding, and, if so, do they include discussions on the equity capital and on operating the "fully commercial undertaking", which was the phrase of a previous Minister of Aviation about a year ago? Will they include the question of the compensation which B.E.A. would receive if it were forced by the Government to operate aircraft which it did not want?
Procuring aircraft for B.E.A. is very much like the game of "I Spy", which we used to play as children, when parents would say, "I spy with my little eye, something beginning with 'M' ", and children would have to guess whether it was, say, microphone" or"mice" or "Minister". The parents would tell them when they guessed right. It seems


to me that B.E.A. have to do that with aeroplanes. They say, "We want the Boeing 727". The Government reply, "You cannot have that". Then B.E.A. say, "We want the BAC211". In reply the Government—I hope not, but they seem or the point of saying it—say, "No. You cannot have that".
Ultimately B.E.A. get to the point of choosing an aeroplane which the Government have already decided that they will have anyway, whereupon the Government say, "You are a good little boy. You can have that one." I could not put this better than the Select Committee put it, very succinctly, in paragraph 64 of Section 2 of its Report:
B.E.A. are put through the humiliation of making successive applications for sanction to order aircraft until eventually they apply to order the aircraft which the Government have in fact already chosen for them. It is inconceivable in these circumstances that B.E.A.'s morale and their relations with the Government will not be seriously impaired.
I fully agree.
May I turn my attention, as many hon. Members have done, to procurement? B.E.A. decided that they wanted the BAC211. They told the Government so briefly in February, and in May they confirmed that with a full economic explanation. On 27th June it was announced that it was hoped that a decision would be made by the end of July. We are still waiting. It is now the middle of November and still B.E.A. have no word from the Government as to which aeroplane they may have. It is apparent that the whole problem is being tackled from. the wrong end and by another Ministry. Another Ministry has said that the European airbus is the aeroplane which B.E.A. should have eventually, and, having decided that—that it will cost this country £100 million or, perhaps rather less, £90 million—the question arises, what will B.E.A. do until this is available?
The Hawker-Siddeley Company has offered the latest version of the Trident—the 3B—which it says it can make at a launching cost of £20 million. But B.E.A. say that it will cost £3 million more to run the Trident 3B than to run the BAC211, which they say puts it out of court.
Many factors have been mentioned about the difference between the Trident

3B and the BAC211, though not such things as the fact that the BAC211 will carry 190 passengers, whereas the Trident will carry only 136. But the real factor is that the Trident 3B is the end of the line. There is no stretch left in it. It is the last possible stretch of the Trident aeroplane—and the only Tridents which have been sold outside this country are a very few to Pakistan Airlines and Kuwait Airlines. All the rest have been ordered and used by B.E.A. No one else has ordered the Trident 2 and it is inconceivable that anyone will order the Trident 3B, whereas the BAC211 is attracting much interest from many other airlines in Europe.

Mr. Robert Howarth: Could the hon. Member substantiate his claim that a great deal of interest is being shown in the BAC211? People who are also very knowledgeable, as is the hon. Member, have described the BAC211 to me as too small and too late. They say that it will be much too late and much too small. Within a year or two it will be overtaken by such aircraft as Lockheed 1011 and the European airbus. Yet here we have an aircraft which will cost the Government, the hon. Member says, £100 million.

Mr. Fortescue: I acquire my knowledge simply from reports in the technical Press dealing with flying and from the daily Press, too, but I understand that the Italians, Germans and Belgians have all expressed interest in the BAC211, and at the moment there is a team from B.A.C. in America attempting to sell the aircraft. There is no such effort in respect of the Trident 3B. What was the other question?

Mr. Howarth: I was referring to the launching cost of the aircraft.

Mr. Fortescue: The launching cost to this country of the airbus is about £100 million, about the same as the BAC211. The Trident 3B, the "interim" aeroplane, would be an additional cost. This being so, I suggest that the proper thing for us to do, especially in our present lamentable financial situation, would be to withdraw from the airbus altogether and rely on the BAC211. At least this would be an all-British undertaking, an aeroplane which is wanted and an aeroplane with a chance of being sold abroad.
In his evidence to the Select Committee, the representative of the Ministry of Technology said that an essential part of starting work on the airbus would be that it was required by the three national airlines: B.E.A., Air France and Lufthansa, each of which would be expected to order 25. When questioned, he added that it was scarcely conceivable that B.E.A. would not buy the airbus if the Government decided to build it. That was almost pressure before starting.
Within the last few days Lufthansa has announced that it will not place an order for the airbus until it is flying, which will be about 1973. It is doubtful whether the airline will order the airbus then because the company will look at the airbus and the other aeroplanes that will be available by then and then have to make its decision. Despite the undertakings that have been given by the German Government to the Ministry of Technology, I understand that Lufthansa is opting out of this. And since the Ministry has said that, unless the three national airlines order 25 aeroplanes each, work will not start, I fear that we are in grave danger of having neither the BAC 211 nor the airbus. Must we order the Trident 3B while we wait for the airbus, only to find that there is no airbus—thus finding ourselves stuck with the Trident 3B, which is the end of the line?
I recommend the Government to consider carefully whether we should not abandon the airbus. After all, there are precedents for one partner in a bi-national aeroplane withdrawing; this should not be left the prerogative of General de Gaulle. In our present financial state, this might well be the most sensible action to take.
I come to the subject of the domestic routes flown by B.E.A. In the first speech I made on aviation in the House, about a year ago, I recommended that B.E.A. should withdraw completely from domestic routes and leave them to the independent airlines. So little was thought of that suggestion by the then President of the Board of Trade that, when replying to the debate, he did not even mention my suggestion. The only thing to have happened, perhaps in consequence, was that in this year's B.E.A. Annual Report there was no mention of the loss made by the Corporation on domestic routes.
For the previous 10 years those figures were given; and I like to think that I had a small influence in that omission.
However, if one digs deep enough one can find the figures. In the last 10 years the domestic air routes flown by B.E.A. have resulted in a loss of about £16 million of the taxpayers' money. Every one of these routes has been unprofitable over that period, leaving aside the Highlands and Islands, which are recognised as being a socially necessary route. B.E.A. is expected to lose on that route, although it is not forced to do so. The Government have persuaded, not compelled, B.E.A. to go on flying it, although the Corporation loses between £200,000 and £300,000 a year in the process.
Consider, for example, the Manchester route. It is a short haul of about 200 miles, one of the distances about which B.E.A. complains bitterly. The Corporation has a monopoly on this route, uses old fashioned aeroplanes—no jets at all —and loses about £500,000 a year. Last year the loss was £509,000. B.E.A. has asked for the fares on that route to be raised and the Air Transport Licensing Board has agreed. Meanwhile, the independent airline which operates the Liverpool route—almost exactly the same distance as the Manchester route— has appealed to the Board to keep the fares down to the old level, it being able to make a profit at that level. Here is a supreme example of the monopoly position of a nationalised industry acting against the interests of the consumer.
The customer is being provided with a second-rate service, a service worse than the independent operator is providing on a similar route. The retort of B.E.A. to this is that it is known that the domestic routes are losing money, but the Corporation will "examine all the routes in depth" before next summer. It has lost £16 million of taxpayers' money and now it will examine all the routes in depth. Does this imply that it has not examined them in depth until now and that when it has lost £16 million that is the moment to examine them in depth? Should it not have examined them in depth if it had lost £15 million, £10 million, or £1 million on them?
Then it says that as a result of examining the routes in depth it is sure that the domestic routes will be made profitable in the summer of 1968, six months


from now. That seems a most remarkable contention for any business to make, that after losing £1½ million a year for over 10 years, by looking at the routes in depth it can make them profitable overnight.
The Corporation may raise the fares on these routes, but has it not occurred to the Corporation that, if it does so, not so many will travel on them? It is not correct to say that there is no elasticity of payment between air routes and electric train routes between London and Manchester or Liverpool. The putting up of fares cannot be the panacea for all the troubles of B.E.A. on its routes.
The trouble is that British European Airways will always, by definition, have out-of-date aeroplanes on its domestic routes. This is its present trouble, because never has it put new aeroplanes on a domestic route, and when it puts jets on these routes they are entirely unsuitable because they are too expensive as they have been bought for the long-haul routes into Europe. So why does the Corporation not get off these routes? What would happen if it withdrew from domestic routes? This question was asked in the Select Committee by the hon. Member for Poplar (Mr. Mikardo). He asked:
What would happen if you opted out of all the domestic routes?
The answer came from one of the executives:
The answer so far as the total domestic network is concerned is that if it were to disappear tomorrow we would be very much worse off in the short run. It would take us a lot of years to catch up with this by expansion of our international business.
This is very difficult to understand because in the Report of British European Airways, 1966–67, appendix 5, an analysis of results shows that the profit on the international routes for that year, taking into account only the variable and allocated and apportioned costs, was £10½ million, which is about 20 per cent. of the turnover. The profit on the domestic routes was £684,000, about 3 per cent. of the turnover. When we add the cost of the centralised services, administration and so on, these figures turn into a profit for the international routes and a loss of about £1½ million for the domestic routes. Yet B.E.A. said that if it aban-

doned all the domestic routes it would be very much worse off in the short run.
I find this extraordinarily difficult to understand. I would be grateful if the Minister could ask B.E.A. to look into this and to let us know its arguments in great detail.

10.55 p.m.

Mr. Cranley Onslow: The Minister of State began by saying that he accepted that there would soon be the need for new legislation on this subject. I share the regret of other hon. Members that we are not now considering that legislation. The money B.E.A. is authorised to borrow under existing legislation was, as he said, expected to have been borrowed by it a year ago. The fact that it has not done so yet is a sad reflection on the way it has been allowed to run its affairs by the Government.
The Corporation has not been allowed to make the most of its potential. Instead, it has been put into a position of extreme difficulty. The hon. Gentleman said that this was all tied up with the terribly difficult problem of re-equipment which is so hard for the Government to solve. I also share the regret that we have not had a decision on that terribly difficult problem either. I believe that it was possible for us to have had a decision and that it is no excuse for the Government to plead their inability to make up their minds as a reason for B.E.A. being in its present predicament.
The Government have not come to a decision for want of pressing. On 2nd November, in another place, in reply to the Earl of Kinnoull, the noble Lord, Lord Beswick, said:
The factors are now sufficiently defined and an early decision can be made."—[OFFICIAL REPORT, House of Lords, 2nd November, 1967; Vol. 286, c. 154.]
One can always expect that, when a noble Lord has said something on behalf of the Government in another place, exactly the opposite will be said here within 48 hours. So it proved in this case, although it was 72 hours later.
The Minister of Technology, replying to a debate on transport on 6th November, said:
… we now come to the much more difficult decision of the interim buy of B.E.A. There is the BAC211, which has been urged by


B.E.A., and there is the possibility of the Trident 3B. There is the VC10 possibility, and the possibility of existing types.
If the Minister of Technology is so mentally confused that he believes that the decision can be defined in these terms now, no wonder no one can make up their minds.
The fact is, whether the right hon. Gentleman knows it or not, that there is no VC10 possibility in this context and there has not been for months. What he means by
… the possibility of existing types …
I do not know because I should have thought that even he would have dismissed Sea Otter and the Beagle Pup from his consideration in this context. Either he does not know what is going on or he is deliberately misleading the House on the subject. He went on to say that no decision had been reached on the matter, which is probably just as well, seeing that he did not understand the position, and he added:
A decision is expected quite soon, but that is as far as I can go on that issue now."—[OFFICIAL REPORT, 6th November, 1967; Vol. 753, c. 764.]
When are we to get a decision? It is intolerable that matters should be allowed to drag on in this way. It is intolerable for the reputation of B.E.A. and for the position of men employed in air operations and in the manufacture of aircraft. Maybe the facts have been complicated by the effects of devaluation which, I suppose, will have the effect of making British aircraft more attractive in world markets and thus producing potential purchasers where none existed before last weekend. But it is time that the Government got around to making a decision and that they took note of the remarks addressed to them by B.E.A. on this subject.
I am glad to see the hon. Member for Bolton, East (Mr. Robert Howarth) still here because I want to quote from B.E.A.'s Annual Report and Accounts for 1966–67, which are very relevant to the subject. On page 66, it is stated:
… B.E.A. is deeply concerned that the present trend of Anglo-French-German negotiations is leading towards an aircraft project which will have a substantially larger seating capacity than we think desirable even for the high density routes of our network.
That is a point which has precisely been taken up by Lufthansa and it is pre-

cisely the reason Lufthansa have given for refusing to commit themselves for European aircraft until a point so distant in time that definition must be completed before Lufthansa make up their minds.
The document goes on:
 It is still abundantly clear, however, that B.E.A. must have a new aircraft of the right size to come into service before the airbus, and a by-product of the BAC 211, which should not be forgotten, is that it is calculated to be as quiet in operation as the turbo-propeller aircraft operating today.
I quote this because although we, on either side, may have opinions sometime, formed on the basis of our visits to, and conversations with, people involved in the aircraft industry, they may sometimes be coloured by the fact that we have a constituency interest in aircraft as well as in the industry as a whole, and we do not pay enough attention to the opinions and judgment of the people we hope are best qualified to run this business on our behalf.
Although there may be arguments, and we can debate as to what aircraft would be suitable if we were Mr. Milward and Mr. Marking, the point is what decisions they take on their commercial judgment. What factors do they take into account? They are not factors of sheer size, but of size related to network and frequency of service and its effect on demand, not the sort of arguments we have heard this evening. I do not intend to inflict that on the House, because I am not an expert.
We should have greater confidence in the men who run the valuable nationalised industries.

Mr. Mikardo: The hon. Member is right in saying that the chaps who run the airlines have the greatest expertise in deciding what is best for them, but he will appreciate that what is best for the industries is not necessarily best for the nation, which has other considerations, like maintaining an aircraft manufacturing industry and not greatly increasing the subsidies we have to give. One of the troubles with what he refers to is that experts are sometimes loth to convey to the sponsoring Ministry the calculations they have made.

Mr. Onslow: I will go so far as to say that what may be good for the Prime Minister may not be good for the nation Let us not have a debate like this.
Before the hon. Member for Poplar (Mr. Mikardo) came in, we were discussing B.E.A.'s judgment—that we should discuss this in the light of what B.E.A management said.
I will quote from page 52 of the Annual Report and Accounts where B.E.A. management says:
BEA is in the course of committing itself to heavy capital expenditure of public money on new aircraft fleets without having assurance that its plans for using those new aircraft will not be overturned or significantly thrown out by new licensing decisions. A firm foundation for long-term planning is essential.
This is coming on the point the hon. Member for Poplar made, and I am glad to do so. The point is that long-term decisions are essential before commitment of public money on this scale. It seems intolerable that they still lack decisions about the future of the Air Transport Licensing Board; about the extent to which nationalised and independent airlines are likely to be able to develop their fleets; about the extent to which airlines are to be backed by hotel facilities. It is regrettable that there is this kind of uncertainly and that we are spending time this evening which we have managed to extract from the Leader of the House—I do not know whether he knows that we are debating this interesting subject now—

Mr. Webster: Send for him.

Mr. Onslow: I do not think he would add a great deal to our debate. We will excuse him for once.
The Minister must understand that the climate of uncertainty simply cannot be allowed to continue very much longer. There must be a decision. A decision has been promised by the end of the month. I wish that it had been made before this debate. The last time that we had a Ministerial pronouncement upon B.E.A.'s finances was effectively on the Second Reading of the Air Corporations Bill, 1965, as it then was. The right hon. Gentleman who is now Home Secretary said:
… the Bill will do little more for B.E.A. than to give statutory effect to what is already the de facto position.
Shortly before that he suggested that we might say:
Happy is the Corporation which has no history."—[OFFICIAL REPORT, 22nd November, 1965; Vol. 721, c. 38.]

That may have been true then, but the history of B.E.A. since has been unhappy, largely through the Government's fault. The de facto position has changed consistently for the worse. I do not believe that this House would be prepared to say, "Happy is the airline which has no future", but we are in danger of having to say that with B.E.A. This is largely the Government's fault.

11.7 p.m.

Mr. Hector Monro: A large part of the debate has consisted of argument upon aircraft procurement. I want to return to the point raised by the hon. Member for Bolton, East (Mr. Robert Howarth) about whether the borrowing powers in this Order will enable B.E.A. to give a satisfactory service to those in the British Isles and outwith it who wish to fly about the United Kingdom. Is the ultimate service as adequate and as good as we have every right to expect?
The hon. Gentleman talked of the passenger explosion. I want to look mainly at the Highlands and Islands of Scotland. It would be a gross overestimate of the situation to talk of a passenger explosion —a mini-blast might be as far as we can go there. Those people are entitled to an adequate air service, and B.E.A. or an independent airline must improve the existing situation.
We are conscious of the very large losses made in the Highlands and Islands as shown in the B.E.A. accounts—£250,000. It is important to point out that there are two particular reasons for this. One is that B.E.A. has never had the right aircraft at the right moment since, perhaps, the wartime Rapide. Secondly, as was brought out fairly dramatically in the Select Committee, there is the system of accounts, whereby onward journeys from Glasgow or Edinburgh, from the Highlands and Islands, have not been credited to that service. The Scottish Council has brought out a most valuable report in recent weeks on communications in Scotland, which touched upon the air services. It stressed the social element and the advantages of the air services to Scotland, particularly over water and at times of difficult conditions, such as when the roads and railways are blocked by snow.
We have now reached a position when B.E.A. and the independents should be


thinking of expansion in Scotland. I am glad that the Army has built airstrips and that some of the old aerodromes such as Connell near Oban have been renovated to enable aircraft to fly from them again. It was a pity that they were allowed to deteriorate after the war. Is B.E.A. thinking of expanding in Scotland? Is it contemplating the purchase of the right aeroplanes? Evidence was given to the Select Committee by Mr. Robert McKean, and all of us who know his tremendous work for aviation in Scotland since the war pay him a warm tribute. He said, talking about the provision of aircraft for the smaller services:
It is not that we are reluctant to do this, but we have not got the sort of fleet of small aircraft.
Is B.E.A. contemplating providing a fleet of small aircraft? Basically, we have only the Viscount in Scotland, and it is far too big for the type of service we require.
At the same time, I do not want to feel that B.E.A. will tread on the toes of the one or two small operators we have, like Logan Air and Strathallan, who are doing an excellent job. I am always very disappointed when B.E.A. oppose their efforts to extend their services, and I hope that it will cease to do this in the future. Is it B.E.A.'s intention to provide more adequate services itself?
On the Anglo-Scottish routes, communications are most valuable when there is high frequency of flights. Could B.E.A. step up the frequency between Edinburgh, Glasgow and London? So often the times of flight are inconvenient to the traveller.
I note that in the Select Committee's Reports there are detailed questions of market research, and I am surprised that it takes so long for B.E.A. to come to a decision on whether or not to improve or increase services. When we are voting a large increase of money to B.E.A. I wonder whether it will use some of it to increase facilities for the passenger, which are very important. I am thinking particularly of the Scottish airports and whether B.E.A. could go out of its way to provide car park facilities. To leave a car in the British Airports Authority car park is very expensive, and B.E.A. could do a lot to help the travelling public in this way.
There is also the question of whether B.E.A. can try to provide a first-class service to the travelling public from Edinburgh, and whether it is pressing the Minister to provide a second runway there, which we feel is absolutely essential. In my modest career as a pilot I was stationed at Turnhouse, and I know just how difficult conditions are with a cross-wind on the present long runway. If the Minister can soon come to a decision the whole of Scotland will be grateful.
I wonder—

Notice taken that 40 Members were not present;

House counted, and, 40 Members being present—

11.15 p.m.

Mr. Monro: Even if we could not fill a Viscount at least it is a start to see that hon. Members on the other side are interested in aviation.
I wish to speak about what B.E.A. is doing to encourage the transport of freight from Scotland, not only to England, but to the Continent. I know that a new terminal is being built at Prestwick, but what efforts is B.E.A. making to increase the handling of freight there? I wonder, too, why B.E.A. is not making any effort to extend flight training at Prestwick, which seems to be an ideal airport for the purpose.
What is B.E.A. doing to help the development districts, which include all Scotland, with communications for industry? Is it the intention of B.E.A. to develop helicopter services? Could it, for instance, consider services in the South of Scotland linking up with a service by fixed-wing aircraft from, perhaps, Carlisle to the South? There seems to me to be tremendous scope for executive travel, with encouragement, where necessary, and the provision of feeder services by B.E.A. There is an enormous opportunity for aviation, both of the more conventional regular airlines and in executive and feeder airlines and helicopters.
I would like to have the assurance of the Minister that B.E.A. is looking at all these aspects and is worrying not only about the big enterprises of the BAC 211 and the airbus, but about the countless thousands of residents of the United


Kingdom who are much more interested in smaller aircraft and getting from their homes to places of work and from their workplaces to the centres of population. I hope that B.E.A. is thinking on these lines and being progressive in thought.

11.19 p.m.

Mr. Alick Buchanan-Smith: In his opening remarks, the Minister spoke about fares. He mentioned the context of devaluation and the effects that it may have and the discussions that the Government are planning concerning fares on international routes. I should like to turn my attention more closely to the internal routes. As all of us know, one of the effects of devaluation will be to increase fuel prices. This will, of course, put pressure on air fares, and we must realise how much greater the burden of increased air fares will be for those parts of the United Kingdom such as Northern Ireland and Scotland which are so much more dependent on air communications for enabling people to get about, and to move their goods.
I was interested to listen to the discussion earlier about services in the Highlands and Islands, and I should like to support very strongly indeed what my hon. Friend the Member for Gloucestershire, South (Mr. Corfield) was saying about the possibility of putting those services out to tender, to private airlines as well as to B.E.A., giving the services to whichever company is prepared to operate them at the lower subsidy. I think this is common sense, and it would make it quite clear that there is in these services an element of social subsidy. It is essential to maintain the economy of those regions that those services should be carired on and, indeed, improved.
I must say, though, that I wish more discussion were given to what B.E.A. is losing on these services. To take the figures for last year, there was a loss of about £270,000, so that the loss was running at about £800 a day. I heard one of my hon. Friends say that the loss on the Manchester services was running at double that, at £1,600 per day. I hope this helps put the matter in perspective, because those who live in Manchester have an alternative service, the electric train service, which can carry them quickly between Manchester and London,

while those in the Islands have no such alternative. The alternative for them is not one of a journey which takes hours, but a journey which takes days. So it can be seen in social terms how much more important for those in the Islands and Highlands the air services are.
Another point I would make is on the relationship between the holiday fares which are charged by B.E.A.—the lower fares in the holiday season—and the fares charged during the rest of the year. This is very important indeed. One of the reasons for the recent increase in fares which came into effect this winter was the loss incurred through some of the lower fares charged during the summer. I question whether it is right that there should be this cross-subsidisation between winter fares and holiday fares for the tourist traffic in the summer. Of course we welcome the tourist traffic in the summer, and we welcome the tourist traffic which the airways bring, but we must realise that it is being paid for by the regular users of air services, those who use them throughout the year—the business community, for example. We are, after all, struggling to get more industry and development to Scotland. Yet the very people who are responsible for that development are having to subsidise those lower summer fares, and I question whether this form of cross-subsidisation is really correct and really in the right interests of Scotland.
I move on to a point touched on by my hon. Friend the Member for Dumfries (Mr. Monro) about cargo terminals, and I would follow him for a moment on the question not only of cargo terminals but proper airport facilities—particularly for Edinburgh, because of the tremendous development, for instance, in Fife and in the new town of Livingston. We know in the last nine months, and in the winter particularly, and some unfortunate weather we have had, the tremendously high number of flights which have been diverted because of the crosswinds at Turnhouse. I hope that we can soon have from the Government an answer which is favourable, because I seriously believe that delay and uncertainty can be a hindrance to economic and industrial development not only in the Edinburgh area. The same is true of the Tayside region as well. We know that the Minister, in conjunction with the


Ministry of Defence, is making facilities avilable at Leuchars. But this is a short-term provision, not giving the long-term answer for the next 20 or 30 years in an area in which it is envisaged that population growth and industrial development will be at a far greater rate than that in any other area in Scotland. I hope, that these two points will be given the right hon. Gentleman's attention.
Moving on to the more specific point about cargo terminals, it is common knowledge that Glasgow and Edinburgh are very far behind in the facilities which they have. It is worth remembering that Scottish industry is concerned with many products which are particularly suited to air transport. Scottish firms already take advantage of air freight to send their products south and overseas. That is particularly true of the electronics industry which is developing in Fife.
When we remember that a far higher proportion of Scotland's industrial production is exported than that of the United Kingdom taken as a whole, we realise the tremendous potential that there is for air freight to service Scottish industry. However, a great amount of that freight has to be routed through London, with all the delays involved in going through the bottleneck at London Airport. It should be borne in mind that, when people send freight by air, they do it for reasons of speed. If there is to be a bottleneck on the way, it destroys a main part of the reason for using air freight for sending that product.
I should like to see B.E.A. giving some thought to the possibility of developing direct air freight services from Scotland to the Continent, instead of going through London Airport. We know the congestion at London Airport and the cost involved in it, and direct air freight services as well as passenger services would be in the interests of Scotland.

Mr. Mikardo: Is there one single route between Scotland and the Continent which would fill with freight even the smallest freighter even once a week?

Mr. Buchanan-Smith: One example, which is perhaps a slightly unusual one, is that of a firm in my constituency which processes shell fish and regularly charters a full plane to send its products to the Continent and the Mediterranean. I

would refer the hon. Gentleman to the Report of the Scottish Council, which goes into the subject in detail. I will not weary the House with it now, but it develops the case for direct freight routes and gives examples of industrial products which could take advantage of them. It is a report prepared by Scottish industrialists, and the hon. Gentleman will find it well worth reading, if he does not believe me.
Turning finally to aircraft procurement, the Report to which I referred earlier drew attention to routes such as that between London and Glasgow, which is the busiest in Europe. It pointed out that it is not necessarily the best route for very large passenger aircraft. What is needed is a very high frequency service by medium-size aircraft. In this connection, the experience in the United States may provide the answer. There is a shuttle service between New York, Boston and Washington. The service has a very high frequency, with no pre-booking, and payment of the fare at the time of travelling. Something like that may give the answer for the development and growth of Scottish services, rather than thinking in terms of aircraft carrying two or three hundred passengers. In the peculiar circumstances of the very high density of traffic between London and Glasgow—and I hope in future between London and Edinburgh—a smaller type of aircraft with a high frequency of service may provide the answer at the end of the day.

Mr. Henry Clark: On present schedules between London and Belfast, there is a five-hour gap in the middle of the day when no plane takes off from London for Belfast. If one needs to be in Belfast for a meeting at 3.30 p.m., one has to get up at 7.30 in the morning to get to it. When the ordinary flight time is three and a half hours door to door, it is ridiculous that this large gap is left in the middle of the day. If we are to have 180 seaters there will presumably be only four planes a day.

Mr. Buchanan-Smith: I am grateful for that intervention. What the hon. Gentleman has said describes exactly the position also on the Edinburgh route. High frequency of medium-sized


aircraft is probably the answer at the end of the day.
If we look at the success of certain of the private airlines on both the Edinburgh and Glasgow routes using the modern small jet, such as the BAC111, we realise the potential that there is for this particular type of aircraft.
It is particularly interesting to look, as I did, at the correspondence in the Financial Times at the beginning of August about the performance of the BAC111. We all know that what B.E.A. is trying to get for its domestic work is an aircraft which will give something of the same economy that it is getting with the Vanguard, which I understand runs at a cost of about 2.1 pence per seat mile.
A lot of figures have been put up for aircraft such as the BAC111, but one figure which was quoted in the correspondence which interested me was in relation to the BAC111 in the United States where it is operated by Braniff Airways on a short-haul network such as we have, showing a cost figure as low as 1.48 pence per seat mile. This demonstrates the potential of this type of smaller jet aircraft on these short-haul routes which we have between Scotland and England. This is important, because already this type of aircraft on the Scottish routes has proved its popularity with the travelling public—the customer. He is the one person who seems to be forgotten in discussions on air matters. When one is herded around London Airport in some of these cattle trucks one feels that the passenger is the last person to be thought about. Yet the way the independent airlines have developed their services in dealing with the passenger, by using modern aircraft instead of aircraft cast off from international routes, shows concern for passenger and passenger comfort which is an example to British European Airways.
I hope that the Minister will pay attention to these particular problems which face Scotland. Transport problems are greater in Scotland. A good air service not only -in the Highlands and Islands of Scotland, but in the regions, such as Tayside, is a thing which I believe can stem migration and help to solve many of our economic and industrial problems at the present time.

11.33 p.m.

Mr. Terence L. Higgins: We seldom have the opportunity of debating civil aviation, and there is no doubt that the standard of debate this evening has been extremely high. I would not presume to speak with great expertise on some of the technical aspects of individual aircraft. My hon. Friends the Members for Woking (Mr. Onslow) and Weston-super-Mare (Mr. Webster) have concentrated on these particular aspects, but I certainly support what they have said about the need to avoid delay in taking decisions about investment proposals.
Similarly, I agree with my hon. Friends the Members for Dumfries (Mr. Monro) and North Angus and Mearns (Mr. Buchanan-Smith) who have spoken of the need to take early decisions about some aspects of aviation in Scotland.
It has become quite clear, as my hon. Friend the Member for Gloucestershire, South (Mr. Corfield) pointed out in opening, that we do have to consider the regional aspects of civil aviation. These are very important indeed if we are to ensure that they have the communications which are necessary if they are to develop on a balanced basis.
Turning to the opening statement by the Minister of State, while I think it is fortunate that we have a debate on this subject, for reasons which I shall discuss in more detail later, I think it can be argued very strongly that this is not exactly the right moment to have had it and certainly not the right moment to debate this particular Order.
It is perfectly clear that the whole basis of this Order has been radically changed by the Government's decision to devalue the £. The Chancellor of the Exchequer has said that a number of cuts, amounting to some £400 million, are to be made in Government expenditure. For example, S.E.T. Premium is to be cut by £100 million, he says the elimination of the export rebate should save £100 million, and defence expenditure is to be cut by £100 million. This leaves another £100 million, which one presumes will come off the nationalised industries. Is there any question of this borrowing allowance for B.E.A. being affected by the general cut back which the Government have said they propose to undertake?
Secondly, what are the precise purposes for which this money needs to be borrowed? The Minister touched on this in his opening speech. He said that it was needed partly to account for programmes which had been sanctioned, and he then used a rather vague expression about covering the future modernisation of the B.E.A. fleet, and so on. It is not entirely clear to what extent the amount which B.E.A. requires to borrow is affected by past decisions, and future decisions, and also to what extent it has been affected by the takeover of Cambrian and B.K.S. to which my hon. Friend the Member for Gloucestershire, South referred. I hope that the Minister will give us a more precise breakdown of the purposes for which these powers are needed.
I propose, now, to relate the Order to the Government's White Paper Cmnd. 3437. "A review of economic and financial objectives", which is concerned with the new criteria which they have laid down for the nationalised industries. Paragraph 18 on page 8 is relevant to the question of cross-subsidisation, which was raised by my hon. Friends the Members for Antrim, North (Mr. Henry Clark), and North Angus and Mearns, namely, whether B.E.A. should cross-subsidise, either from profitable to non-profitable routes, or from operations which take place at one time of the year to operations which take place during a different season.
It seems that the White Paper is quite clear on this subject. Leaving aside the question of social subsidisation, to which I shall refer in a moment, it says:
…to cross-subsidise loss-making services amounts to taxing remunerative services provided by the same undertaking and is as objectionable as subsidising from general taxation services which have no social justification".
I hope the Minister will assure the House that B.E.A. will be conforming to the stipulation set down in the White Paper about cross-subsidies.
I want, now, to turn to the more difficult question of subsidies justified on grounds of Government policy, which has been discussed by a number of hon. Members tonight. I think that there is almost complete consensus that, if a service is to be run at a loss for social reasons, it is right and proper that this

should be set out in the accounts separately from ordinary commercial services so that the House of Commons and the country as a whole will know what it is costing to operate such services.
This, too, is dealt with in the White Paper, which says on page 14:
Nationalised industries, which command much greater resources than all but the very largest private undertakings, should expect to be numbered among the most progressive and efficient concerns in the country. Where there are significant social or wider economic costs and benefits which ought to be taken into account in their investment and pricing these will be reflected in the Government's policy for the industry: and if this means that the industry has to act against its own commercial interests, the Government will accept responsibility.
This is relevant to two different questions tonight—first, whether the Government should subsidise a route to a certain part of the country. I do not want to elaborate in great detail what my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) said on this subject, although the White Paper is relevant to what my hon. Friend was saying. I want to deal with the question of Government subsidy to B.E.A. which specifically encourages the use of aircraft which is justified on the ground of Government policy rather than on purely commercial considerations. The whole purpose of the Government White Paper on Nationalised Industries—which is relevant to Order, enabling B.E.A. to finance investment proposals—is to say that in future investment decisions by the nationalised industries must be undertaken on a consistent basis, and one which is in line with the best possible techniques of capital budgeting.
I find myself in difficulty in reconciling the White Paper and the Order and I hope that the Minister can enlighten me. If we work out a capital proposal of the kind which will be financed under the Order and we spread out, through time, the sequence of income payments which are likely and the sequence of cash payments which will be incurred, in order to make an investment decision on a discounted cash flow basis, we should need to allow for an element of subsidy. We could include the subsidy either as a lump sum paid at the moment at which the present value is calculated, or, alternatively, allow for a series of operating subsidies


spread out through time which can then be reduced to their "present value". We should thus express the whole thing on a consistent basis.
But once we do this the whole investment decision turns upon the size of the subsidy and the whole argument becomes completely circular. Whether we choose one aircraft with this series of cash flows and expenditures or an alternative aircraft with two different sets of figures, the whole decision must ultimately depend on the size of subsidy, whether it is an operating subsidy or a lump sum subsidy.
I should be grateful if the Minister of State would make clear how he gets round this circular argument. It is no good carrying out an investment proposal on the sophisticated lines laid down in the White Paper if the ultimate decision is a purely arbitrary Government decision on the question whether B.E.A. should invest in one aircraft rather than another.
I turn now to a related point mentioned in the Minister's opening speech. He expresses the borrowing requirements and the expenditures likely to take place under the Order as a series of amounts for different years. He gives us a figure for 1967–68 and a figure for 1968–69, and so on. I hope that when in future Ministers talk about such nationalised industry's accounts year by year they will also tell us what the significance is in present-value terms, otherwise we cannot always evaluate the figures they put before us.
In discussing some of B.E.A.'s investment proposals the Minister also said that about £10 million will come from internal resources. This is a problem familiar to those who are concerned with investment proposals in business—the problem of how one should relate the cost of capital raised outside to the cost of capital provided from internal resources. I should like to know, when the Government undertake investment proposals of this kind, whether the internal capital provided is charged at the rate of interest the Government are otherwise charging B.E.A. or at the actual rate of return on capital which the industry concerned—B.E.A.—could otherwise obtain on its investments. This is a technical point, but it comes up in other contexts, and I hope that we can have a clear answer, if not tonight, in the near future, and a ruling

which would apply to all the nationalised industries.
I do not want to take the debate too wide into other points which arise on the White Paper, but I must mention paragraph 10, page 5, concerned with the procedure which the Government will use in the nationalised industries, B.E.A. for example, to relate the rate of return relevant to B.E.A. to that which could be obtained in any outside industry. The suggestion is that the nationalised industries should employ a different test rate from that of private industries, because the latter, unlike the nationalised industries, have to consider the effect of their investment allowances. I have a strong feeling that this alters the pattern of the cash flow and the nationalised industries should base their calculations on notional investment allowances. Again, I do not expect an answer at short notice, but there seems a flaw in the White Paper here.
Devaluation of sterling alters the impact of the Order. I have grave doubts whether this borrowing requirement, which was right before this week-end, is still right. Perhaps the hon. Gentleman should reconsider whether the Order should go through as it is. First, 74 per cent. of B.E.A.'s revenue comes from overseas flights, which are carried out not under free market conditions but under rates set by I.A.T.A. Contrary to the White Paper, prices in B.E.A. are not influenced by the Prices and Incomes Board but by I.A.T.A. Perhaps the hon. Gentleman could tell us whether the Board will have any say in this matter.
We are not clear what percentages of activities to be financed by these loans are concerned with overseas domestic flights. The 74 per cent. of operations which involve overseas flights accounted for £60 million revenue to B.E.A. in 1966–67. The crucial question following devaluation is what percentage of this amount was paid in foreign currency and what in sterling.
It is now possible for B.E.A. to adopt one of two alternative strategies. The first would be for them to leave the fares expressed in sterling at the same level and therefore to leave prices and margins unchanged. This would make B.E.A. more competitive, because foreigners travelling by B.E.A. would find that the price to them had been reduced. It is


likely that more foreigners would travel by B.E.A. in the future than in the past. If so, we should expect revenue to go up and the increased turnover to be worth 14 per cent. more.

Mr. Mikardo: Has not the hon Member forgotten the pooling system? That would upset those calculations.

Mr. Higgins: I am aware of that. Having served with the hon. Member on the Air Corporations Bill in 1966 I feel that he knows that I have not forgotten about it. I shall touch on it in a moment and ask the Minister to explain exactly what the effect will be either of this alternative or of the subsequent alternative which I shall soon explain. The first proposal is that B.E.A. would leave fares the same, in terms of sterling, so that British airlines would become more competitive. Their revenue would tend to increase and in terms of sterling it would be worth 14 per cent. more. If we take a cash flow of £60 million we find that 14 per cent. is about £8·4 million in terms of sterling, and if I understand the situation correctly that would cover about half the increase in the borrowing requirement covered by this Order. If that is so, is it necessary for us to have the Order in this form?

Mr. Ridley: Surely I.A.T.A. would never allow us to do that? It is an alternative in theory but not in fact.

Mr. Higgins: This is a highly complicated matter and it is right that we should spell out both alternatives. I will come to the second alternative in a moment. My estimate is very crude and needs to be modified downwards to allow for the fact that not all fares paid on international routes are paid in a foreign currency. A very high percentage is paid in sterling. But it needs to be raised to allow for the fact that the turnover will increase if we become more competitive. This alternative may or may not be theoretical. We shall have to see how the I.A.T.A. conference goes.
The second alternative is for the Government to ask for fares quoted in sterling to be raised. The Minister clearly indicated that he thought that this was likely to happen. I thought it rather a surprising thing to admit so readily and I gather that the Government want it to happen. If we raise the fares quoted

in terms of sterling, turnover will not rise as much as it would otherwise do. Nevertheless, even if we raise the fares, in terms of dollars, to exactly the same parity as that which existed before devaluation—we shall still be in a situation in which the value of the turnover in terms of sterling is 14 per cent. up. This means that a greater revenue will go into B.E.A. Again it should be possible for them, because they will have raised their prices and their profits and margins, to reduce the borrowing requirements.
The choice between these two alternatives will depend on what estimates B.E.A. and the Government make, first of the elasticity of demand—that is, how much demand is likely to fall or rise as a result of the changes in fares—and secondly of the shape of the cost curve, although in this context that is not all that relevant since few aircraft are working at full capacity.
I hope the Minister will indicate which of these alternatives the Government are likely to favour and why this will not increase the finance of B.E.A. in such a way that the borrowing requirement of the Corporation need not be as great and need not be raised by increasing the borrowing allowance from £110 million to £125 million.
The hon. Member for Poplar (Mr. Mikardo), who is an expert in these matters, said that this would be radically altered by the pooling arrangements. I hope that the Minister will spell this out—I admit that I do not fully understand the workings of the operation in the present situation—and will say what effect this will have on either of the two alternatives about which I have spoken. Will he also say how the pooling arrangement affects his decision about whether or not B.E.A. should raise its fares in terms of sterling?
Other important questions must be asked about the effects of devaluation. The right hon. Gentleman will be aware that the Select Committee Report pointed out on pages 276 and 277 that while international fares were governed by the I.A.T.A. arrangements, fares in the United Kingdom and on cabotage routes were a matter entirely under our control. Are we to understand that these fares are also to go up as a result of devaluation—because, for example, of the effects it


will have on the price of fuel—or are they to remain the same? Have the Government taken into account the results of devaluation on the competitive power of British airlines compared with that of foreign airlines?
My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) stressed that some definite views may be held about the I.A.T.A. ruling. Is it intended that the I.A.T.A. conference, to be convened in a few days' time, should merely look at the question of fares, or will it also look into the question of capacity? It may be that as a result of devaluation—if we are to take advantage of it—there should be an increase in the amount of capacity British airlines have on routes controlled by I.A.T.A. Will the three conferences of I.A.T.A. be brought into this matter, or will it be confined to the European conference?
The Minister spoke with assurance. He expects the rates to go up. However, he will appreciate that the power within I.A.T.A. depends on the unanimous vote of all the individual airlines. The major way in which they influence rate determination is through the threat of creating an open market situation. That happens when a previous agreement has expired and when a new arrangement has not yet been negotiated. But it is difficult for any airline, person or government who wishes to raise the rates to produce the same sort of impact on such negotiations as the impact produced by those who wish to cut the rates. This being so, what hopes do Her Majesty's Government have of being able to alter the rates in the way they apparently intend to do?
Devaluation will, I believe, radically influence the whole question of B.E.A.'s future financial arrangements. It will alter the entire cash flow, not only on the revenue side—regardless of which of the two decisions are taken about fares—but also on the costs and fuel side. Also bound up with this are the costs of aircraft, both British and American.
All these mean that the whole situation has to be radically reappraised. I therefore express surprise that the Government should have decided to put forward this Order this evening when clearly they have not yet fully worked out the impact which devaluation is likely to have on the matter, and when I very much doubt that B.E.A. has had an opportunity to

do so. We should be grateful if the Minister would say whether we shall be likely to have another opportunity of debating air fares after the I.A.T.A. conference.

12 m.

Mr. J. P. W. Mallalieu: I agree with the hon. Member for Worthing (Mr. Higgins) that this evening is not the appropriate occasion for discussing some of the matters which have been raised tonight, but I do not agree that it is not appropriate to discuss this Order. This Order brings to the maximum what is permitted to be borrowed and it is for expenditure entirely in sterling. Money that is required and the investment which will follow from it does not seem to be affected in any way by devaluation.
Wider matters which the hon. Member raised with great cogency are extremely complicated and I am not capable of giving an answer to many of them off the cuff. They may well be affected by devaluation. It will take some time to work out exactly what the effects will be on the whole future of capital investment for B.E.A. and its capital structure. I could not give an answer to that off the cuff. Obviously, it is a matter which is being, and has been, discussed ever since the devaluation decision was announced.
The hon. Member asked if I could give an assurance about a discussion in this House on fares after the I.A.T.A. meeting. I cannot give an assurance on that. It would be a matter for the Leader of the House, but when we have seen what the position is about fares, I will certainly convey to my right hon. Friend the point the hon. Member made. If there were great dissatisfaction, it would be open to the Opposition to raise the matter.
I wish to correct a statement the hon. Member made, or perhaps an impression I gave him, that the Government had decided on their policy about fares. I was asked what I though the effect would be and I said that sterling fares seemed likely to go up. That seems a fair deduction. Non-promotional fares, first-class tourist and economy fares to countries which have not devalued are likely to go up. That almost axiomatically would follow, but other fares—for I.T. holidays and to countries such as Ireland or Spain which have devalued, or are


likely to devalue, might go up by small amounts, or not at all. It is still too early to make any pronouncement about what the future of fares is likely to be.

Mr. Higgins: But surely it is impossible to know how much B.E.A. will need to borrow in order to finance its operations if we do not know what decision has been taken on fares and, therefore, what the revenue and future cash flow to B.E.A. will be.

Mr. Mallalieu: I agree, but that is not affected by the Order. I cannot see that the Order is affected in any way by that matter. The wider things to which the hon. Gentleman has referred must be dependent to some extent on the effect of devaluation.

Mr. Ridley: For how long will the Order run? We do not want to pass the Order until we have much more knowledge of how long it will run. But we shall not know how long the Order will last while we do not know what the fares position will be. What is the money for? We must have more information.

Mr. Mallalieu: I do not know whether the hon. Gentleman was present earlier when I explained in detail what the money is for. The money will be required. Indeed, some of his hon. Friends have been saying that perhaps the Order is not generous enough and that more capital is required by B.E.A. There is not the slightest doubt that this capital is required and that we should provide it by this Order.
I want to deal with some of the detailed points raised before I touch on one or two of the wider general principles. First, there was, I think, a misunderstanding by the hon. Member for Liverpool, Garston (Mr. Fortescue) about whether B.E.A. is buying or leasing the terminal at Heathrow. He quoted Question No. 1696 on page 224 of the Select Committee's Report, implying that B.E.A. would rent the cargo terminal. That referred not to the cargo terminal which is being dealt with by money under this Order, but to the passenger terminal. The land for the cargo terminal will be leased but the building is being paid for by B.E.A.

Mr. Fortescue: The hon. Gentleman did not mention the word "cargo" in his reference to it. I thought he was referring to the passenger terminal.

Mr. Mallalieu: The hon. Member for Weston-super-Mare (Mr. Webster) seemed to be complaining that there was no date on the Order. It will come into force only when I have signed it and I would not dream of signing it before it had been passed by the House. To put a specific date on it before the House had passed it would be very rude. The Order needs the approval of this House only and not the other place because it is a money Order and, when this House approves it, it will be forthwith put into effect.
The hon. Gentleman also asked about the future of the travel allowance, which is very relevant to airlines generally and to B.E.A. in particular. There is a Question down to my right hon. Friend the Chancellor of the Exchequer tomorrow and, in the well-known phrase, I cannot anticipate his statement.
The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) asked about Exchequer dividend capital. This form of capital financing is certainly not contemplated either by the Government or by B.E.A. as a suitable means of discharging the Government's August pledge to B.E.A. simply as a means of passing dividends or cutting them.
There may be a case for the introduction of the Exchequer dividend capital into B.E.A. structure at a later date. If it puts forward proposals I would be prepared to consider them.

Mr. Webster: It is the practice for B.O.A.C. to have this Exchequer dividend capital grant, which is a waiver of interest rates. Without supporting the B.E.A. claim why is it that it was allowed for B.O.A.C.? What is the advantage of it?

Mr. Mallalieu: Not being a financial expert, I would say that it is a reasonable thing when an undertaking is commercially viable. I do not think that it would be a good thing as a means of deficit financing of any sort. Before we could consider that we have to be certain of what the future prospects of B.E.A. are likely to be.
Turnhouse has been mentioned and I am aware of the desire of all those concerned with Edinburgh to get their new runway. I have first to try to settle the vexed question of ownership. That is proceeding as fast as possible. Questions about B.E.A. services in Scotland and the help required in regional development are all matters of great concern to B.E.A. and the Government. No doubt these points will be fully considered by the management.
Almost every speaker has dealt with the highly difficult problem of the future requirement of B.E.A. There has been a good deal of cross-talk—directional and not in temper—between Members on the same side of the House and across the Floor. This shows how extraordinarily difficult it is to reach a decision upon this. Although I have heard every word on this subject tonight, there was no new point put forward that has not been considered, or is being considered.

Mr. Onslow: I suggested that the effects of devaluation upon the viability of the two types of aircraft under consideration would need to be examined. I doubt whether the Government have completed a full examination on this. The point, which the Minister must have taken, put forward by everyone, is the urgency of a decision.

Mr. Mallalieu: Even the devaluation point is not a new one. It has only just come up, but it was at once appreciated by everyone that this has a bearing, and it is being very seriously considered. I agree upon the urgency, from the point of view of B.E.A., of getting a decision.
As my hon. Friend the Member for Poplar (Mr. Mikardo) has said, it is the responsibility of the airline to choose what it thinks is the best aircraft for its purposes. It is the responsibility of the sponsoring Department, the Board of Trade, to put the airline's case as strongly as possible. It is equally the responsibility of every Department and the Government as a whole to look at the wider necessity—the possible use of resources in different ways. This sort of decision cannot be decided solely by the needs of the airline. Other considerations must be taken into account. The Government as a whole must make up their mind and then publish a decision.
12.15 a.m.
Various hon. Members have expressed doubt, as did the Select Committee, about the machinery for working out procurement. There is a thing called T.A.R.C., the Transport Aircraft Requirements Committee—[An HON. MEMBER: "Useless".]—It has a useful purpose in discussing fairly general topics, such as whether there will be a place in aviation for a minibus, but clearly when one has on that body representatives of management and one is trying to find what is valuable for British industry it is unlikely that one will get complete frankness. If I were a manufacturer with something up my sleeve I would not tell it to my opponents.
Because of this, it has now been decided that there should be a special executive of T.A.R.C. which will have powers to call in people, airlines, or manufacturers as and when required, and which will be able to make a serious attempt to find out what aircraft are available, when they are likely to be available, what marketing research has shown, and what is the best way of tackling the needs of civil airlines.

Mr. Dobson: To whom would that information be available and how soon would the people interested in airline questions be able to obtain it?

Mr. Mallalieu: It has to be available to the Government as a whole, because it is the Government as a whole who have to make these decisions.

Mr. Onslow: Is it going to be involved in the case at issue?

Mr. Mallalieu: No.

Mr. Onslow: Thank goodness for that.

Mr. Mallalieu: It has gone beyond that stage. Because of the urgency we shall be giving a decision very shortly.
A good many references have been made to the proposals and recommendations in the Select Committee's report. I have read it. I think all hon. Members will agree that it is a good one. I am not going to comment on it now because it needs thorough study. We hope later to be able to present our views on its recommendations. I am not sure that it would not be a good plan to delay our discussions on that until we have had thorough detailed recommendations


and analyses from the Edwards Committee.
There was a suggestion from some of those who framed the Report, I think, that this discussion of the report might wait until then and the House might consider whether we should delay final discussion until Edwards has reported.
There has been a good deal of criticism, from both sides, of the Air Transport Licensing Board and criticism from outside, but I think the criticism has been a little unfair. If there are faults in licensing policy—and very few will deny it—it is not the fault of the A.T.L.B. or of the Board of Trade, but very much the fault of the Act.
The Edwards Committee is sitting now, just to consider the possible future roles of licensing and the structure of the airline industry. The Government appointed the Edwards Committee as an independent body. We did so honestly to try to get at the facts about civil aviation as it is at present, and to try to get an objective analysis of its structure and what the structure should be in the future.
Civil aviation is one of our most important industries. [HON. MEMBERS: "Hear, hear. It would be a great distress, to put it no higher, if it were to become in political and Parliamentary terms the sort of football that the steel industry became at one time. What the Government want to do is to try to find a solution, not a permanent solution, but one for the next 10 or 15 years, which will be so generally acceptable, not only to both sides of the House but to the people, that this great industry can go ahead for a steady period knowing the limits and the possibilities within which it must work.

Question put and agreed to.

Resolved,
That the British European Airways Corporation (Borrowing Powers) Order 1967, a draft of which was laid before this House on 31st October, be approved.

LICENSED TRADE

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Harper.]

12.22 a.m.

Mr. William Price: I sympathise with my hon. Friend who is to reply to the debate. I understand that there was some difficulty in finding an appropriate Minister, not because no one wanted the job, but because the subject is one in which a number of Departments have a responsibility, including the Home Office, the Board of Trade, the Treasury and the Ministry of Agriculture, Fisheries and Food. For that reason, I shall not press my hon. and learned Friend too strongly tonight and shall be satisfied with a written reply to any matter which remains outstanding.
The debate is of interest and concern to 60,000 licensees, many of whom are planning a mass demonstration at the House tomorrow, and the millions of people who use our public houses, some rather more regularly than others. I should like to make absolutely clear at the beginning that I have no intention of suggesting any alteration in the Road Safety Act. I have always supported my right hon. Friend the Minister of Transport on the breathalyser test, and I have no intention of changing my mind.
I am not arguing the case tonight for the breweries or their shareholders. They are well able to look after themselves. I want to bring to the attention of the House some of the difficulties facing the licensed trade as a result of various factors, one of which undoubtedly is the introduction of the breathalyser test.
I should like to quote a letter, one of many I have received in the past week. Headed "Licensee's Lament", it states:
I can see myself in the near future applying to the Social Security for help. If you were employed in industry and were forced to go on short time then you could draw dole, get tax rebates and so on, but not the licensees. Oh, no! Even though you have paid your self-employed stamp, you cannot draw dole. If your profits are down you cannot get a rebate on your tax. Even though your house is empty you still have to have the bright lights and the central heating. What is going to happen when we next have to meet our bills? Our overheads are still going up. Will the Government help us? Will the breweries help us, or will we just have to give up when are savings are exhausted?


My house has just been modernised, the brewery paying for structural alterations, the rest my own expense—new furniture, fitted carpets, light fittings, the lot. Make no mistake, the brewery does not pay for these in management houses.

Mr. Deputy Speaker (Mr. Sydney Irving): Order. The hon. Member has not yet indicated what Government responsibility there is in this matter, bearing in mind, of course, that on the Adjournment he cannot ask for legislation.

Mr. Price: I was just coming to that, Mr. Deputy Speaker. I have had long discussion over the past week with Mr. Speaker in an effort to keep me in order. I do not usually succeed in debates, but I shall do my best.
My correspondent goes on to say that having got everything completed, he could see himself paying off his debts in good time, but then came the breathalyser and his new car park is empty. He says that he is not the only one who is sick with worry and that many more licensees are far worse off than he is.
How has this situation arisen? Basically, the reason is increasing competition and generally rising costs, some of which are the direct responsibility of the Government and some of which are the result of circumstances outside the control of anyone. There has been a considerable increase in home deliveries of alcohol. There has been severe competition from clubs, and in the view of many licensees the Government have been giving preferential treatment to the clubs as against pubs. In more recent times there has been the appearance of licensed grocery stores. Indeed, if the Consumer Council gets its way according to a report submitted to the Monopolies Commission, all supermarkets will be given as of right a licence to sell alcohol.
On top of all that—and I suppose that it could be argued that competition does no one any harm—the trade has had to face substantial increases in wages, heating and lighting and the Selective Employment Tax. Yet in the light of all these curbs, an application to the Government for an increase of a penny a pint on beer, with the money going direct to the retailer and not to the brewers, was turned down.
No one on this side of the House wants to argue for an increase in the price of anything, but that application seems to me to be far more justified than many increases which have been inflicted upon the public. It is being considered by my right hon. Friend the Minister of Agriculture. I do not expect my hon. Friend the Under-Secretary of State to comment on it. I merely ask him to bring my argument to the attention of his right hon. Friend.
A penny increase would certainly help, but even that has to be put in perspective. A landlord would have to pull a great many pints to make an extra £1. The view of the trade is that such an increase would do no more than meet the additional direct costs of the past three years. The trade would still be faced with the effects of the breathalyser test, the only outcome of which, if it succeeds, will be a substantial reduction in income available to licensees, particularly those in the rural areas.
The great danger—it is happening already—is that licensees will argue against the Minister and against the breathalyser test, not on rational and road safety grounds, but from fear of financial hardship and, perhaps, bankruptcy. There is no doubt that many pubs have been severely hit. Estimates vary between 20 and 50 per cent. in the rural areas, while others depending largely on town trade have had little effect.
I therefore ask, what is the answer? My purpose was to try, within the rules of order, to explain the difficulties of the licensed trade. The rules of order prevent me from putting any radical solution, but I shall pursue that on another occasion. There is one course which has been adopted in the past and which I believe could make a significant difference, and that is, a variation in the rates of duty imposed by the Chancellor on alcohol. It has been suggested that the licensed trade collects approximately £1,000 million a year in duty for the Chancellor. I appreciate that this is hardly the right time to ask the Chancellor of the Exchequer to give anything away at all, but it is possible that a small reduction passed directly to the public houses would have the effect of keeping many of these unpaid collectors in business.

Mr. Speaker: Order. The hon. Member may not, on the Adjournment, argue about the next Budget.

Mr. Price: I am grateful, Mr. Speaker. I had been advised that in fact that could be done by Statutory Instrument. But I will pass from that point anyway.
If the country pub goes out of business it is my view that everyone will lose, certainly the landlord, the community, and, in all probability, the Chancellor. No one could expect a big reduction in duty, but I suggest that a small one might provide the stimulus needed in the trade.
I wonder if I may quote one further letter which arrived this morning:
I am the owner of a small country pub serving a community of about 350 people, and I think it fair to claim that I am providing a social as well as an economic service for the village. Times have been difficult in the past, but never more than at the present, but the reasons are too well known to need stating. The position is simply this. My income during the past month is down by more than 40 per cent. I am certain that at the moment I am operating at a loss. Conditions may, of course, improve, but there is no doubt at all that the future of my pub is in jeopardy.
The question I ask the House to consider is this: should the licensees be expected to stand the full cost of what I regard as highly desirable social legislation? In my opinion the answer should be, "No". They will have to stand much of it. The brewers should divert some of their vast profits. The customers will have to make their contribution, and it is my argument that the Government should also play their part.
The fact that a planned demonstration of fewer than one hundred people from Rugby has escalated in a week to a probable national protest tomorrow of 3,000 licensees in London is an indication of the very real concern throughout the trade. The local pub is a feature of community life we can ill afford to lose. I believe that, on the evidence available, hundreds of our pubs, particularly those in isolated rural areas, those we can least afford to lose, are likely to go.

12.33 a.m.

The Under-Secretary of State for the Home Department (Mr. Dick Taverne): I am in some difficulty in replying to the points raised by my hon. Friend the Member for Rugby (Mr. William Price), and I am grateful to him for the sympathy which he has shown in realis-

ing my difficulties. Many of the matters he has raised are matters for other Departments, and I cannot, of course, answer for them, and some of them are not matters for the Government.
Certainly I shall be glad to refer to my right hon. Friend the Minister of Agriculture the remarks my hon. Friend has made about the request for the extra penny to go to the landlord for each pint. Also, if I am within the rules of order, I shall be glad to pass on my hon. Friend's remarks to the Chancellor of the Exchequer in relation to the adjustment of duty. On this issue, as the Home Office is itself a brewer, there may be some conflict of interest between the Treasury and the Home Office, but certainly this is a matter which I shall pass on.
There were one or two other matters my hon. Friend raised which were in the sphere of the Home Office. Let me say that I certainly appreciate the point which my hon. Friend has made, and one must sympathise with the position of the licensee and his family, but I fear that there is very little that I can say tonight which will give much comfort or much help.
My hon. Friend referred, for example, to the breathalyser. I was very glad to hear that he did not ask for any change, although that would not have been in order, because, however great the hardship to licensees, it is vital to remember that we are here concerned with an attempt to save life and to save people from serious injury. We cannot be diverted from that aim, and I am sure that the public at large would not wish us to be if they could see the accident statistics in personal terms. It may be, however, that the effect of the breath test law will be an incentive to some members of the trade to diversify their trade as it is practised at the moment.
On the general position of Home Office responsibility for the licensing laws, it is very important to bear in mind that these are intended to provide some control over the public consumption of intoxicating liquor. They aim at control for social reasons, and they seek to achieve this through the public supervision of those who sell intoxicating liquor by retail or who supply it for consumption in registered members' clubs.
The licensing laws are not aimed at restricting the opportunities for competition in providing a service to the public in this industry. They are not laws designed for an economic purpose in the sense of regulating or limiting the extent to which one section of the industry advances at the expense of another. It is not the aim of the laws to stop the customer buying where and from whom he chooses, or consuming alcohol in a particular place of his choice, provided that the licensing justices are persuaded that the social aims of the laws are justified.
My hon. Friend referred to the preferential treatment that was received by the registered clubs. I do not accept that the Government are giving preferential treatment to these clubs. Of course, I am prepared to listen to any special representations that my hon. Friend has, and I admit that these clubs have certain advantages, but I am not sure that the complaints of the licensees should be addressed to the Government. It is true that the law gives some advantages, because the whole family can enter members' clubs, whereas young persons under the age of 14 are barred from the licensed parts of public houses. It is true that there is some greater flexibility in hours. But a very important factor is the greater entertainment which many registered clubs can afford to give. Part of the explanation for the attraction of clubs lies in the fact that the brewers have often invested more money proportionately on improving the facilities and decor of clubs as places for all the family to go to than they have on modernising public houses. If that is so, the people to whom their complaints should be addressed are the brewers. It is not something in which the Government can interfere.

Mr. William Price: The argument which is most frequently used by licensees is that one of the biggest attractions in clubs, unfortunately, is the presence there of gaming machines. My hon. and

learned Friend will appreciate the difference in the way that clubs are treated compared with pubs in regard to gaming machines.

Mr. Taverne: Certainly that is a point which I can consider, but it is not one which I can discuss now because it will involve changes in the law. However, there will be an opportunity to discuss the point when we come to the Gaming Bill which will be laid before the House in the near future.
My hon. Friend referred briefly to the evidence given by the Consumer Council to the Monopolies Commission. We must wait for the Commission's Report, and any comments that it wishes to make on that evidence, but I would take this opportunity to say that our licensing laws should be adapted to changing conditions and should reflect modern needs and attitudes. To some extent, they reflect the conditions of half a century or more ago.
If it proves that there is widespread feeling that some of the provisions of our licensing laws would benefit from amendment, we would be willing to give careful consideration to any proposals.
I am afraid that I have not been able to offer my hon. Friend, or those for whom he spoke, much comfort certainly so far as our responsibilities are concerned; but I think it is important to remember that the purposes of the licensing laws are social, not economic.
Of course, we are ready to listen to proposals for alleviating the position, but one cannot consider this solely from the point of view of the licensee any more than one can look at the development of commerce generally solely from the point of view of the small trader. One must look also at the interests of the customer, the consumer. The licensing laws are not designed to give a specially protected position to the traditional licensee.

Question put and agreed to.

Adjourned accordingly at nineteen minutes to One o'clock.